Here’s a letter to someone who is all-too-typical of protectionists: A person who, being utterly unfamiliar with the most basic bits of economics, mistakes his ignorance for insight.
Mr. Seligman:
Frustrated by your inability to effectively refute on Facebook those of us who oppose Trump’s tariffs, you blurt out this accusation: “Economists are All Knowing or at least they think so.”
Nothing could be sillier.
Those who fancy themselves to be all-knowing are protectionists, for it is they who insist that Americans are currently producing too few manufactured goods (or too few of whatever outputs happen to be on the protectionists’ menu du jour). It is protectionists who claim to know that more Americans should be working in manufacturing, and it is protectionists who assert that America would be better off if foreigners invested less in the U.S. and instead bought more U.S. exports.
In response to this protectionist pretense of possessing superhuman knowledge, economists point out that neither you nor any other protectionist can possibly know what you presume to know. You cannot possibly know, beyond that which actually prevails, what is the ‘right’ mix and kinds of imports and exports. Ditto for the ‘right’ mix of employment types, as well as for the ‘right’ mix of foreign investments. We economists go on to note that the only remotely reliable source of such knowledge is the market – the freedom of individuals to spend and invest their money in whatever peaceful ways they choose. By supporting free trade, economists defend the economy from protectionists, who – when they’re not simply pleading for ill-gotten gains – are inebriated with intellectual arrogance.
Although we economists never presume to be all knowing, when discussing trade we do not shy away from expressing knowledge of two realities that protectionist routinely ignore or deny. The first is that every resource has alternative uses; more workers and capital cannot be shifted to industry A without causing the amount of labor and capital available to be used in industries B, C, … N to be less than otherwise. The second, again, is that no one knows better than the market what is the ‘right’ mix of imports, exports, capital flows, and employment types.
If you and other protectionists came to know these two realities, you would escape the hubris that leads to you endorse government superintendence of how people spend their own money. And you would then correct the inaccuracy of your Facebook scream by replacing the word “Economists” with “Protectionists.”
Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030
