Protectionists Are Deeply Confused

by Don Boudreaux on August 12, 2020

in Growth, Myths and Fallacies, Trade

Here’s a letter to the full-throated protectionist who posts publicly under the name “Warren Platts.”

Mr. Platts:

Commenting on Pierre Lemieux’s recent EconLog post “Flaaen et al. on Washing Machine Tariffs in the A.E.R.,” you write (and I quote verbatim):

You economists continue to baffle me. Why should a high cost to consumers be a bad thing? “Cost to consumers per job” is literally means the same as “labor productivity.” Thus a high cost to consumers per job means that job is highly productive.

In follow-up comments, Pierre, along with my student Jon Murphy, responded well to your misunderstanding. I here emphasize one fundamental point: You confuse ends with means.

In markets, high wages are rewards paid to means (namely, skilled labor) used to achieve especially urgent ends (namely, satisfaction of especially intense consumer demands). Consumers don’t purchase in order to serve workers; instead, workers work to serve consumers. And society grows more prosperous the greater is the satisfaction of these consumer demands.

You and other protectionists miss this reality by mistaking high wages themselves as being sources of prosperity (instead of what such wages are, namely, rewards for creating prosperity). You are led by your failure to understand that prosperity grows from the satisfaction of consumer desires to the utterly bizarre conclusion that society is made more prosperous the greater is the number of urgent needs – urgent consumer desires – government artificially creates by imposing tariffs and other protectionist obstructions.

Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA  22030


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