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Quotation of the Day…

… is from page 168 of NYU economist William Easterly’s excellent 2006 book, The White Man’s Burden:

The beauty of the market’s focus on the individual is that customer choice gives feedback to suppliers. If flights to Los Angeles on Southwest are fully booked and you attempt to book an additional seat, that’s a signal to Southwest to schedule more flights or raise prices. The wonder of markets is that they reconcile the choices of myriad individuals.

DBx: Yep.

Protectionism obstructs the market’s process of reconciling the choices of myriad individuals. The preferences of protected workers and firm-owners – or of the social engineers who successfully press their industrial-policy schemes – are given artificial weight; the preferences of consumers and other workers, entrepreneurs, and investors are artificially discounted.

Oren Cass and Robert Lighthizer, for example, believe that people who prefer to work in jobs conventionally classified as “manufacturing” should be subsidized to enjoy this preference. (Note that such workers could, without government intervention, retain their manufacturing jobs if enough of them were willing to take pay cuts. The fact that too few such workers are willing to take the pay cuts necessary to retain such jobs means that these workers in fact do not value retention of these jobs highly enough to cover the cost of retaining these jobs.) These protectionists either ignore the fact that other people must be compelled to pay these subsidies, or they insist that the preferences of their favored group somehow deserve to be weighted more heavily than are the preferences of those persons compelled to pay.

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