… believes that if the government successfully prevented red-headed consumers from patronizing any producers with hair color other than red, then red-headed people as a group would thereby be made more prosperous.
… believes that we Americans would be even wealthier than we now are if each of the 50 states were a sovereign nation that restricted its citizens’ abilities to import goods and services not only from Europe, Asia, and other far away places, but also from each of the other 49 states. After all, if creating artificial scarcities in the United States is key to increasing each American’s access to goods and services, imagine how much richer we Americans would be if we in Virginia enjoyed the artificial scarcities created by the government in Richmond obstructing our access not only to goods and services sold by the likes of Canadians and the Chinese, but also to goods and services sold by the likes of North Carolinians, Marylanders, Californians, Hawaiians, and Americans in other states. Ditto for Louisianans whose wise leaders in Baton Rouge obstructed their ability to import goods and services not only from places such as Mexico and Japan, but also from places such as Mississippi, Texas, New Jersey, and other U.S. states. Ditto also for Oklahomans, Nebraskans, Minnesotans, Floridians, Vermonters, Arizonans, Alaskans, and citizens of each of the other states.
Or put somewhat differently, a protectionist is someone who regards American courts as having visited upon Americans a curse rather than a blessing through these courts’ consistent interpretation of the U.S. Constitution as meant to create among these united states a free-trade zone.
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See also here.
The Maduro Diet – in which you have legions of determined assistants to ensure that you keep your calorie count at levels that guarantee weight loss. (HT Morgan Frank)
In this 100th “Dead Wrong” video Johan Norberg celebrates human ingenuity.
With his usual and admirable realism, George Will remembers the late Billy Graham.
Max Borders warns of the dangers of a Universal Basic Income.
Here’s Damon Root’s most recent celebration of Frederick Douglass.
In the January/February 2004 Freeman I argued that in modern commercial societies the observable differences – those that are visible to the naked eye – between even the hyper-rich and ordinary people are today small and shrinking. My column is below the fold.
… is from David Hume’s essay “Of Commerce” (here from page 254 of the 1985 Liberty Fund collection of some of Hume’s essays, edited by the late Eugene Miller, Essays: Moral, Political, and Literary) (original emphasis):
But when we reason upon general subjects, one may justly affirm, that our speculations can scarcely ever be too fine, provided they be just; and that the difference between a common man and a man of genius is chiefly seen in the shallowness or depth of the principles upon which they proceed. General reasonings seem intricate, merely because they are general; nor is it easy for the bulk of mankind to distinguish, in a great number of particulars, that common circumstance in which they all agree, or to extract it, pure and unmixed, from the other superfluous circumstances. Every judgment or conclusion, with them, is particular. They cannot enlarge their view to those universal propositions, which comprehend under them an infinite number of individuals, and include a whole science in a single theorem. Their eye is confounded with such an extensive prospect; and the conclusions, derived from it, even though clearly expressed, seem intricate and obscure. But however intricate they may seem, it is certain, that general principles, if just and sound, must always prevail in the general course of things, though they may fail in particular cases; and it is the chief business of philosophers to regard the general course of things.
DBx: A common, pedestrian example of the flawed reasoning that Hume here warns against is the protectionist’s commission of the fallacy of composition when evaluating trade and trade restrictions. The protectionist sees what even a toddler can see – namely, that if the potential customers of some favored firms are penalized if and when they patronize the rivals of those favored firms, the business of the favored firms improves. The favored firms encounter a higher demand for their outputs. The favored firms produce more. The favored firm’ revenues rise. The favored firms employ more worker and purchase greater quantities of other inputs. The favored firms pay more in taxes.
As David Hume would not have actually said – but as he would certainly have agreed – “Well, duh.”
The protectionist then leaps victoriously to the conclusion that, therefore, protectionism paves the path to widespread prosperity. It’s a leap of ignorance.
What the protectionist doesn’t see is the reduced spending elsewhere in the domestic economy by consumers, both domestic and foreign. What the protectionist doesn’t see is the reduced investment elsewhere in the domestic economy by investors, both domestic and foreign. What the protectionist doesn’t see are the outputs not produced by domestic producers, and the jobs not performed by domestic workers, as a result of the artificial expansion of the protected firms. What the protectionist doesn’t see are the wage rates that didn’t rise because the trade restrictions tamp down the growth of worker productivity. What the protectionist doesn’t see is the greater difficulty of especially poorer households to stretch their budgets in ways that enable them to improve their standard of living. What the protectionist doesn’t see is the fact that, once government starts doling out such special privileges, entrepreneurs who would otherwise devote all of their time, effort, and resources to building better mousetraps spend more and more of their time, effort, and resources building better lobbying arrangements and schemes. What the protectionist doesn’t see is the danger to the rule of law and to freedom that lurks in government powers to dispense such special privileges.
The protectionist sees none of this because to see it requires a bit of abstract reasoning and knowledge of general principles. The protectionist rejects such reasoning and principles as girly, as academic, as not fit for a practical man of affairs – a man who knows only what he actually sees, and who sees only what is dancing immediately in front of his nose.
Greg Mankiw’s recent New York Times column offers an excellent summary of some recent research on international trade. And I love his conclusion:
That is the theory and evidence regarding international trade [which shows that trade quite unambiguously yields net benefits to the denizens of the free(r) trading countries]. I don’t expect this academic work to persuade Mr. Trump. But he is said to pay more attention to briefings that contain his own name. So let’s return to Adam Smith’s birthplace and ponder these questions:
Should we impose a tariff on Americans vacationing at Scotland’s Trump International Golf Links? Or should vacationers make their consumption choices free from the heavy hand of government?
Alas, I predict that Mankiw’s argument will persuade no protectionists.
My prediction is no criticism of Mankiw’s argument, for no argument for free(r) trade will persuade protectionists. Protectionists – with exceptions too rare to mention – are an unpersuadable lot. They are blind to the full effects of trade. Just as you cannot make a blind man ‘see’ the color yellow and ‘see’ how the color yellow differs from the colors green and red, you cannot make a protectionist see the jobs created in the domestic economy by trade – you cannot make a protectionist see that the consumer benefits created in the domestic economy by trade overwhelm whatever short-term ‘losses’ trade (that is, economic competition) inflicts – you cannot make a protectionist ‘see’ that a rising domestic trade ‘deficit’ is generally both evidence of a healthy domestic economy and a source of further domestic economic growth – you cannot make a protectionist see that a government that stands ready to dole out protectionist favors will inevitably be corrupt and captured by special-interest groups – you cannot make a protectionist see that trade across political borders is a manifestation of healthy economic competition that differs in absolutely no meaningful ways from any other manifestation of healthy economic competition.
In short, you cannot make a protectionist see. Protectionists are incurably blind to all but the indistinct outlines of a few large, well-lit figures that dance immediately before their noses.
The goal of free traders ought not be to ‘convert’ protectionists. Such conversions are impossible – or too improbable to be concerned with. The goal, instead, is to persuade those who haven’t yet formed settled opinions on the matter – especially young people – that all peaceful trade deserves a strong presumption of legitimacy, and that this presumption is not weakened one iota for trades that happen to traverse political borders.
Arguing with a protectionist is like arguing with a man who is almost totally blind but who believes himself to have unusually superior vision. This sad and unfortunate creature sees only a handful of large, bright images that dance immediately in front of his nose and yet he is convinced to his marrow that he is observing reality in all of its vastness and in vivid detail. When he is informed by people whose vision is better than his that he, in fact, is blind to most of reality – and, indeed, blind to the most important aspects of reality – he haughtily rejects this information, sometimes even with anger. He knows what he sees and he sees no reason to believe that there are swathes and details of reality that are beyond the handful of large, bright images that dance immediately in front of in nose.
His blindness-induced ignorance makes him supremely confident. He knows what he sees, and mistaking the sliver of images that he sees for all of reality, arrogantly accuses those whose vision is in fact superior to his own of seeing, not reality, but mirages. What else can such images be – images of the greater economic growth and increased widespread prosperity in all trading countries – but mirages? After all, if the nearly-blind protectionist can’t see these images, they cannot possibly be real, don’t you see?!
… is from pages 630-631 of The Works of James Wilson (1804):
There have been times – there still are countries and times, when and where the rule, founded in justice and nature, that the property of the parent is the inheritance of his children, has been intercepted in its benign operation by the cruel interference of another rule, founded in tyranny and avarice – the crimes of the subject are the inheritance of the prince. At those times, and in those countries, an insult to society becomes a pecuniary favor to the crown. The appointed guardian of the publick security becomes interested in the violation of the law; and the hallowed ministers of justice become the rapacious agents of the treasury.
DBx: Adam Pritchard and I featured this quotation at the beginning of our Summer 1996 Missouri Law Review article, “Innocence Lost: Bennis v. Michigan and the Forfeiture Tradition.” Adam – who for many years now has served on the law faculty at the University of Michigan – teamed up with me in the mid-1990s to then write several items on civil asset forfeiture. This book review that appeared in the Spring/Summer 1996 Cato Journal is another of the items that we wrote together on this topic.
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James Wilson was a signer of the Declaration of Independence.
… believes that rickshaws are a much better means of urban public transportation than are busses or subways because the number of workers required to transport any given number of passengers is much higher with rickshaws than with busses and subways. The protectionist – assuming (contrary to fact) that he or she has any capacity for consistency in thought – would lobby to prohibit busses, subways, and even taxies, bicycles, and skateboards on the grounds that these transportation options employ fewer urban-transportation workers than would be employed by a policy of using only rickshaws.
… if she were a high-school math teacher would, at the start of the school year, promise to give to each of a subset of her favorite students a grade of ‘A.’ She would justify this promise by theorizing that when she relieves these students from the pressure of being practically obliged to invest a lot of scarce time and effort toward the studying that is necessary to earn a high grade – that when she releases these students from the distraction and bother of having to compete against their other classmates for high class standing – these favored students will thereby be prompted to study longer, harder, with greater diligence and attention, and with more success than they would study if they were not guaranteed to receive a high grade.
And at the end of the school year, this teacher points with pride to the ‘A’s assigned to each of these favored students, telling the world that these high grades prove the workability and wisdom of her method of ‘protecting’ her favorite students from the need actually to compete to earn high grades. “My students do ‘A’-level work because they were guaranteed to get ‘A’ grades; had they not been protected by this guarantee, they would have been under much too much pressure actually to perform well. And we know that they performed very well indeed because, hey, look! – They all got ‘A’s!”
