Here’s a letter to a long-time reader of my blog who is unhappy with what he describes as my “knee jerk opposition to America First policy.”
Mr. M__:
Thanks for your email.
You’re unhappy with my pointing out that protectionism is the bizarro theory that says that people gain greater access to goods and services the more their government shrinks their access to goods and service. Accusing me of engaging in “extreme oversimplification,” you write that you “can imagine how reducing our imports leads us eventually to produce so much more at home that we end up richer than before.”
With respect, policy should not be guided by what you, I, or anyone else can imagine. I can imagine winning the lottery, but this image doesn’t prompt me to quit my job and rush out to buy a Lamborghini. Policy should be guided by what is probable, not by what is merely imaginable.
If you dislike my lottery example, here’s a different example that’s more closely connected with trade. I can imagine that your standard of living would rise if neighborhood thugs were to routinely destroy some of your property. They steal your 2018 Camry: you respond by working harder to earn enough income to buy a 2026 Mercedes S-class sedan. They burgle your dining room: you respond by working harder to earn enough income to replace your stolen Ikea-bought dishes and utensils with fine China and exquisite silverware. They vandalize your outdoor deck: you respond by working harder to earn enough income to build a new deck twice the size of your old one. They rip to shreds your above-ground swimming pool: you respond by working harder to earn enough income to install a built-in swimming pool.
I have no trouble imagining what I just described. But I do have trouble imagining that you’d feel yourself to be enriched by being a victim of such thugs even if you responded as I describe.
If you’re confident that such thuggery would reduce your standard of living, you should be equally confident that thuggery of the sort called “U.S. protectionism” will reduce Americans’ standard of living. I can’t imagine why any sensible person would think otherwise.
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
