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Quotation of the Day…

… is from pages 324-325 of the final chapter of Columbia University economics professor Arvind Panagariya’s superb and must-read 2019 book, Free Trade and Prosperity:

I have reviewed several major cases of sustained rapid growth and found that in every case, low or declining barriers to trade were an integral part of the growth strategy…. I do not find a single case in which high or rising protection has accompanied rapid growth.

DBx: Protectionists and advocates of industrial policy deny the reality described here by Professor Panagariya. In defense of their schemes, they offer recitations of obscure theoretical possibilities (that no sound economist denies) and long lists of ways – also well-known to economists – in which real-world markets differ from the perfectly competitive markets described in economic textbooks. And amidst their tiresome recitations and lists protectionists and advocates of industrial policy never fail to include also claims about reality that are either certifiably mistaken or horribly misconstrued.

What protectionists and advocates of industrial policy never do, though, is to explain how government officials who impose tariffs and dispense subsidies will acquire the knowledge necessary to make likely the promised success of their schemes.