Quotation of the Day…

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… is from page 63 of Anne Krueger’s 2020 book, International Trade: What Everyone Needs to Know:

When domestic producers know that their market is protected, efforts to innovate and improve the quality of goods protected from imports may be reduced because of the lack of competition. Timely delivery of orders seems less important and quality control often weakens. These direct effects lead to lower productivity growth in the affected industry (and perhaps in the industries using the import-competing item as an input).

DBx: Yes. Protection from competition might well fatten up protected firms, but it also inevitably makes these firms lazier and less responsive to buyers’ desires. This reality is one that ought to be kept more firmly in mind, especially by people who call for protection of this and that industry on national-security grounds.