… is from page 357-358 of the original edition of Walter Lippmann’s sometimes deeply flawed but profoundly insightful and important 1937 book, The Good Society:
The man who has built himself a castle above the highway in order that he may exact a toll from the merchants on their way to market acquires wealth not by producing it but by seizing it. His predatory incursions arbitrarily yield the returns which would otherwise go to invention, industry, and thrift. But for his castle and his armed hands he would be poorer than the passing merchant whom he despoils: because he is more powerful but is unrestrained, he reaps a greater reward from highway robbery than other men can make by producing wealth. Thus the ideal of equal rights for all and special privileges for none is inseparable from the pursuit of liberty.
DBx: Yes.
Lippmann’s account, while correct, is incomplete. It’s not only the merchants waylaid by the highway robber who are harmed by the robber’s extractions. Two other groups of people are harmed by the robber’s greedy actions. Consumers whose access to goods is reduced by the highway robber are harmed; also harmed are those merchants and their employees who produce and sell less because consumers are obliged by the highway robber to spend more on the goods sold by the robber’s direct victims.
Protectionism is nothing but this sort of highway robbery camouflaged by uniforms, flags, and marble columns, and justified by pseudo-scientific ‘analyses.’ Any clever sophomore can whip up coherent theories of how allowing robbery (or arson, or rape, or even murder) under just the right conditions will improve humanity’s welfare. All efforts, past and present, to justify protectionism as a tool for economic improvement are no better than what would be offered by such a clever sophomore. (Indeed, many of these efforts aren’t even coherent.)
