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Quotation of the Day…

… is from page 535 of the 1982 Liberty Fund version of the 1978 Oxford University Press edition of Adam Smith’s Lectures on Jurisprudence (spelling modernized):

In general, however, all taxes upon importation are hurtful in this respect, that they divert the industry of the country to an unnatural channel. The more stock there is employed in one way, there is the less to be employed in another.

DBx: This truth is simple, important, and undeniable. Nevertheless, this truth is routinely ignored by protectionists who ‘reason’ that ten peaches that the government arranges, through its trade restrictions, to be transferred from Ann to Bob – because this transfer obviously leaves Bob with more peaches – not only does not leave Ann with less fruit, but increases the total amount of fruit available to be enjoyed by both Bob and Ann.

Such is the ‘logic’ of protectionism: 10-3=15. Protectionists spend untold hours and amounts of effort denying or hiding this core feature of their doctrine. But at day’s end, economic protectionism boils down to this feature – to this bizzaro-land arithmetic.

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