… is from page 81 of the 2010 Revised Edition of James D. Gwartney’s, Richard L. Stroup’s, Dwight R. Lee’s, and Tawni H. Ferrarini’s Common Sense Economics (footnote deleted):
Trade restrictions neither create nor destroy jobs; they reshuffle them. The restrictions artificially direct workers and other resources toward the production of things that we produce at high cost compared to others. Output and employment shrink in areas where our resources are more productive – areas where our firms could compete successfully in the world market if it were not for the side effects of the restrictions. Thus labor and other resources are shifted away from areas where their productivity is high and moved into areas where it is low. Such policies [imposed by the U.S. government] reduce both the output and income levels of Americans.
DBx: Yes.
Keep the above elementary yet key point in mind when you next hear – as you will if you pay attention to debates over trade – a protectionist dismiss us economists as naive for our alleged glorification of consumption and ignorance of the importance of production. Such claims by protectionists are meant to convince uninformed listeners and readers that protectionists are far more realistic and sophisticated than are economists and other advocates of free trade. ‘Those silly free traders ignore production while we serious protectionists recognize the importance of production’ – that’s a favorite line of protectionists. Protectionists either haven’t actually read much that is written by serious proponents of free trade or they hope that their audiences haven’t done so.
