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Quotation of the Day…

… is from page 161 of the 2007 Liberty Fund edition (Bettina Bien Greaves, ed.) of Ludwig von Mises’s 1949 treatise, Human Action (original emphasis):

People cavil much about Ricardo’s law of association, better known under the name law of comparative cost. The reason is obvious. This law is an offense to all those eager to justify protection and national economic isolation from any point of view other than the selfish interests of some producers or the issues of war-preparedness.

DBx: Yes. The principle of comparative advantage (which is the ‘law’ to which Mises here refers) is indeed a mighty intellectual obstacle for all persons who assert that protectionism is a means of increasing the wealth of the people of a nation. That it isn’t perceived as such by these persons reflects only their failure to understand it and its consequences.

Anyone who asserts that the principle of comparative advantage doesn’t apply in the modern world, doesn’t apply when capital and labor are mobile across international borders, doesn’t apply when capital or labor or both are immobile within national borders, doesn’t apply when it’s possible for humans consciously to change the pattern of comparative advantage, doesn’t apply when trade is so-called “imbalanced,” doesn’t apply when foreign governments impose tariffs or dispense subsidies, doesn’t apply during recessions, doesn’t apply when the government doesn’t compensate trade’s so-called ‘losers,’ doesn’t apply here, doesn’t apply there, doesn’t apply blah, blah, blah is someone who simply doesn’t understand the principle of comparative advantage.

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