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Unreal Assumptions

Here’s another letter to this student of economics:

Mr. Mendoza:

Thanks for your e-mail.

You write that it’s “extremely uninformed” of me “to compare today’s sophisticated justifications of protectionism with the disproven Ptolemaic theory of our solar system.” “There are,” you insist, “sound and proven theoretical exceptions to free trade.”

I disagree.

There are logically coherent tales of how raising tariffs here and subsidizing exports there can, under certain circumstances, cause national income to rise. But these tales are irrelevant to reality. They work only on white boards. To work as advertised in reality, such tariffs and subsidies would have to be administered by government officials who are both apolitical and in possession of superhuman amounts of knowledge. The belief, or assumption, that such creatures exist strikes me as every bit as disproven – as every bit as unrealistic – as are Ptolemy’s crystalline spheres.

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