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… upon seeing a robbery victim pay a hefty ransom to a thief for the return of stolen property calls the ransom the thief’s “income” and counts that “income” as a net addition to the nation’s wealth.
The protectionist, after all, is blind to the fact that income is genuinely earned only when it is the result of the successful reduction of scarcity – only when it is received as payment for the provision of some good or service that would not otherwise exist. Income is earned when it is the reward for making a net addition to the flow of goods and services available for human use.
The protectionist focuses only on the income and ignores the reason it is earned. This blindness of the protectionist causes him to leap to the mistaken conclusion that income payments themselves are net additions to prosperity. The protectionist looks with just as much admiration upon the receipt of a ransom payment by a thief – a payment made possible only by the thief’s prior act of unnecessarily creating more scarcity – as the protectionist looks upon the receipt of income by a worker who acts only to reduce scarcity.
Protectionism’s ‘logic’ is as follows: Use government coercion to make scarcity worse; watch some producers in the home country receive higher incomes as a result of responding to this increased scarcity; conclude that protectionism enriches the home country.
Protectionism’s ‘logic,’ of course is anything but. It’s utter and unsalvageable nonsense. It’s as idiotic as is the assertion that 5-2=8. Yet the desire to believe that subtraction is addition – that prosperity springs from plunder – that some favored groups’ government-granted privileges are a national treasure – is so strong that protectionism continues to attract champions and adherents.