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Quotation of the Day…

… is from page 233 of economist Lionel Robbins’s superb and still-relevant 1937 book, Economic Planning and International Order:

Only in the middle of the eighteenth century did men begin even to conceive of a world in which privilege to restrict should be restricted and in which the disposition of resources should obey not the demands of producers for monopoly, but the demands of consumers for wealth.

DBx: Alas, though, something in human nature – or perhaps something in how economies marked by an extensive division of labor present themselves to the human mind – fuels in humans an urge to revert to the pre-modern, pre-Adam Smithian understanding of economic reality. Far too many professors, pundits, and politicians across the political and ideological spectrum assess an economy’s performance not by how well it increases the quantity and quality of goods and services made available to people as consumers, but instead by how well it protects people as producers in their particular, existing occupations.

Many of these professors, pundits, and politicians hold their protectionist beliefs sincerely. Yet they fail to understand that industries, firms, shopkeepers, and workers are productive only if and insofar as these producers produce goods and services of value to consumers. It’s admirable to work, and it’s right to take pride in one’s work. But the admiration and pride come from the positive contributions the worker makes.

In a market economy, a worker who is genuinely productive makes a positive contribution to his or her self (and to his or her family) only by making a positive contribution also to the well-being of others. Workers who make positive contributions to themselves and their families not by producing things of value for others, but by seizing things of value from others, are predatory rather than productive. Such ‘work’ is not admirable and should not be a source of dignity for those who engage in it. Unfortunately, professors, pundits, and politicians who support protective tariffs create the false impression that the workers whose jobs are thereby protected are productive rather than predatory.

The fact that these workers do not perceive themselves as being predatory is undoubtedly true. But the essence of what’s going on isn’t changed one bit by these workers’ mistaken perceptions of the nature of their jobs. Workers in jobs protected by trade restrictions are not net contributors to the well-being of their fellow citizens.

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