… is from page 58 of Anne Krueger’s 2020 book, International Trade: What Everyone Needs to Know:
Protection against some sectors of the economy inevitably entails discrimination against other sectors.
DBx: Indeed. It cannot be otherwise.
Industries X and Y cannot expand without industries A and B being made smaller and less efficient than they would otherwise be. Protectionists point only to expanded industries X and Y and, boasting of being more clever than free traders, insist that the tariff-induced expansion of industries X and Y is sufficient to prove that protection works and that free trade fails. Protectionists nearly always ignore industries A and B (as they also ignores the fellow-citizen consumers whose costs of living are artificially raised by protectionist measures).
But on those rare occasions when protectionists do acknowledge the shrinkage of industries A and B, they – protectionists – simply assert that the value of what is gained by the expansion of industries X and Y is greater than is the value of what his lost by the shrinkage of industries A and B. Yet never do protectionists explain how they come to this conclusion. They never reveal to us what source of knowledge they tap to determine that what is lost from the shrinkage of A and B is more than made up for by what is gained from the expansion of X and Y. We are simply to trust the protectionists’ instincts, hunches, superstitions, and divinations.
Maddeningly, these same protectionists are quick to allege, with contempt, that the case for free trade is based on “faith,” despite the fact that we free traders do point to a source of knowledge and information – the competitive price system – that allows us to say, with great confidence, that value of that which is produced by industries that expand under a regime of free trade is greater than is the value of that which would have been, but is not, produced by industries that shrink under a regime of free trade.
The dogmatists in this debate aren’t the free traders; the dogmatists are the protectionists.
