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Quotation of the Day…

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… is from page 250 of my late, great teacher Leland Yeager’s, and David Tuerck’s, superb and still-relevant 1966 book, Trade Policy and the Price System [2] (footnote deleted; the author quoted within this quotation is Walter Salant):

In a dynamic economy, all sorts of changes strike innocent victims. If they could count on the same sympathetic hearing that victims of import competition traditionally get, other victims would readily present the same sort of heart-tugging human-interest appeals for relief, complete with stories of dedicated old craftsmen cast on the scrap-heap. The crises in an Upper Michigan community when a shift of demand from wooden to metal station-wagon bodies forced the closing of a Ford plant illustrates the general nature of issues raised by specific dislocations. Problems of trade liberalization “do not reflect an inherent conflict between the needs of the domestic economy and the needs of international economic policy, but rather the more general conflict between the security of an existing status of an individual or a firm or an industry an any change, whatever its cause.”

DBx: Yep. And in a country as large, with an economy as (pre-Covid) dynamic, as that of the United States, the number of jobs ‘destroyed’ (and created) directly by international trade is a tiny fraction of the total number of jobs ‘destroyed’ and created by economic forces generally – that is, by economic churn [3].

I pick only one small nit with Leland’s and David’s wording: people who lose jobs in competitive markets aren’t truly victims [4]. Such people suffer burdens, of course. But a true victim is someone who suffers because his or her rights have been violated – he was murdered; she was raped; his pocket was picked; her car was stolen; their house was torched by an arsonist.

But people in markets have no legitimate expectation, beyond what they contract for, of continuation of the commercial patronage of others. This fact implies that others are under no obligation to continue to patronize someone  simply because these others have chosen in the past to purchase something from that someone. If and when these others chose to reduce their purchasing from that someone, that someone loses nothing to which he or she is entitled, either legally or ethically.

To play by the rules of a free and liberal society requires playing by this particular rule.

…..

(Yeager and Tuerck quote Walter Salant from a 1958 volume titled Foreign Trade Policy, but I can find no link to this volume on-line.)

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