Bonus Quotation of the Day…

by Don Boudreaux on April 29, 2023

in Crony Capitalism, Doux Commerce, Trade

… is from page 25 of William Gladstone’s January 1890 contribution to a debate, with James G. Blaine of Maine, on free trade versus protectionism; these remarks are published in volume CCCXCVIII of the North American Review:

In speaking thus, we speak greatly from our own experience [in Great Britain]. I have personally lived through the varied phases of that experience, since we began that battle between monopoly and freedom which cost us about a quarter of a century of the nation’s life. I have seen and known, and had the opportunity of comparing, the temper and frame of mind engendered first by our protectionism, which we now look back upon as servitude, and then by the commercial freedom and equality which we have enjoyed for the last thirty or forty years. The one tended to harden into positive selfishness; the other has done much to foster a more liberal tone of mind.

DBx: Protectionism is legalized plunder. It is the unjust use of state power to do deeds that, were a person to attempt to perform privately, that same power would justly be used to prevent.

Yet economic ignorance, often combined with ignorance of empirical realities, often leads well-meaning people to view protectionism favorably. The rent-seekers who are unjustly enriched by protectionism of course welcome this ignorance and often stoke it. But ignorance that causes acts of plunder to be falsely perceived as acts of productive statesmanship, or at least as something less than acts of plunder, does not change the underlying reality: Protectionism is plunder gussied up to appear peaceful and unobjectionable to the untrained eye.

As Gladstone suggests, the greater is the acceptance of this form of plunder, the more will it encourage the exercise of people’s venal and conniving muscles. One benefit, therefore, of a steadfast policy of free trade is that it helps these dangerous muscles to atrophy as it stimulates better and more-civilized muscles, such as those of genuine commerce and of mutual respect. Insofar as trade is free, everyone gains by helping as many as possible of his or her fellow citizens to gain as much as possible. Insofar as trade is restricted, the few gain by inflicting larger losses on the many.

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