by Don Boudreaux
on February 21, 2018
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?!
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by Don Boudreaux
on February 21, 2018
… 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.
….
James Wilson was a signer of the Declaration of Independence.
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by Don Boudreaux
on February 21, 2018
… 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.
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by Don Boudreaux
on February 21, 2018
… 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!”
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by Don Boudreaux
on February 21, 2018
… warns of the grave dangers to the neighborhood if a family on the next street refuses to save and thus prevents additional resources from being channeled into a neighborhood factory, and who warns of the grave dangers to the neighborhood if a family in the next town chooses to save in a way that channels additional resources into the very same neighborhood factory.
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by Don Boudreaux
on February 21, 2018
My Mercatus Center colleagues Veronique de Rugy and Christine McDaniel argue in today’s Investor’s Business Daily against the Trump administration’s cronyist scheme to punitively tax Americans who buy imported steel. A slice:
In other words, for every steel worker that may be helped by the import tax, there are over 38 workers in steel-using sectors that may be harmed by it. Further, the vast majority of steel-consuming manufacturers are small businesses that don’t command the ability to pass higher prices on to their consumers.
Also from my intrepid Mercatus Center colleague Veronique de Rugy is this honest assessment of Mick Mulvaney.
In my latest Pittsburgh Tribune-Review column I celebrate the power of the economic way of thinking. A slice:
Another example [of a point emphasized by David Friedman]: You buy a jacket, telling friends it “cost” you $100. But your statement is inaccurate. When you gave, say, five $20 bills to the clerk, what you really gave up wasn’t five pieces of paper engraved with Andrew Jackson’s portrait. What you really gave up is whatever you otherwise would have bought with those five pieces of paper.
Suppose that, had you not bought the jacket, you would have bought a meal at a nice restaurant for you and a friend. In this case, you compared a jacket to that restaurant meal.
We humans constantly compare apples to oranges — and choose sensibly between them.
The University of Chicago’s James Traina finds evidence against the claims of the increasing number of those who call for more vigorous antitrust enforcement. (HT Tyler Cowen)
Speaking of antitrust, GMU Econ alum Patrick Newman has this nice new paper in Public Choice on the origins of the Sherman Antitrust Act: that piece of legislation was not intended to promote genuine competition.
Jairaj Devadiga argues that politicians are generally aware of the harm done by minimum-wage diktats.
David Henderson makes the case against hand-wringing over income inequality. A slice:
If the problem we care about is poverty, then the calls to tax the rich and reduce income inequality are misguided. Instead, we should be cheering for policies that lead to higher economic growth. One other important measure is increased immigration. Allowing more immigration into the United States would allow people to move from low-productivity jobs in poor countries to higher-productivity jobs in America. That would dramatically improve the plight of the poor while also improving, but by a smaller margin, the well-being of the rich. Piketty, for all his faults, put his finger on how to do so. He wrote: “A seemingly more peaceful form of redistribution and regulation of global wealth inequality is immigration. Rather than move capital, which poses all sorts of difficulties, it is sometimes simpler to allow labor to move to places where wages are higher.”
Amen, frère.
My colleague Walter Williams reflects on Black History Month.
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by Don Boudreaux
on February 21, 2018
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by Don Boudreaux
on February 21, 2018
… is from an August 1894 letter from Pres. Grover Cleveland to Rep. T.C. Catchings (D-Mississippi) in which Cleveland gave his reasons for refusing to sign a tariff act; I discovered this quotation on page 292 of Douglas Irwin’s marvelous 2017 volume, Clashing Over Commerce:
When we give to our manufacturers free [that is, untariffed] raw materials we unshackle American enterprise and ingenuity, and these will open the doors of foreign markets to the reception of our wares and give opportunity for the continuous and remunerative employment of American labor. With materials cheapened by their freedom from tariff charges, the cost of their product must be correspondingly cheapened. Thereupon justice and fairness to the consumer would demand that the manufacturers be obliged to submit to such a readjustment and modification of the tariff upon their finished goods as would secure to the people the benefit of the reduced cost of their manufacture, and shield the consumer against the exaction of inordinate profits.
DBx: Cleveland here makes the case against the mercantilist fallacy that trade policy should encourage maximum domestic production and minimum domestic imports. Protectionists who subscribe to this fallacy often approve of low or even no tariffs on inputs used by domestic producers (especially domestic producers who produce for export markets) as a means of encouraging domestic production and exporting. But these protectionists demand high tariffs on consumer goods as a means both of preventing the outflow to foreign countries of money and – more importantly – of protecting domestic producers from competition. (Many modern American subscribers to this fallacy are under the absurd delusion that protecting American producers from foreign competition will make these producers “great again.”)
Protectionists are always looking out for the interest of a subset of existing domestic producers. Protectionists care nothing about consumers except insofar as consumption spending is a means of furthering the end of maximally and artificially inflating the revenues of the favored subset of existing domestic producers.
….
As. U.S. presidents go, Grover Cleveland is my all-time favorite. H.L. Mencken perceptively called him “a good man in a bad trade.”
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by Don Boudreaux
on February 20, 2018
Today – February 20th, 2018 – is the second anniversary of what is by far the single most popular blog post that I’ve ever written. It’s on how ordinary Americans today are quite plausibly materially richer than was J.D. Rockefeller a mere 100 years earlier. I stand by that claim. And if my claim is correct – or even if it is a candidate for being correct – of what relevance is all of today’s hand-wringing over, and pontificating about, differences in the sizes of monetary incomes or of monetary wealth?
If you are alive today in a first-world country, you are historically off-the-charts super rich. You are among the luckiest and most fortunate human beings ever to draw a breath. So if you’re complaining about the fact that your income or wealth isn’t as high as is that of, say, Bill Gates or George Clooney or your neighbor-the-neurosurgeon, stop it and grow up. You are complaining about an insignificance. Appreciate your immense good fortune.
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by Don Boudreaux
on February 20, 2018
… if he sells an automobile to a stranger for cash, believes that the value of this exchange for him is maximized if he stashes every bit of the cash into his mattress and never, ever spends it. That is, this protectionist believes that he would make himself worse off if ever he would spend any of the cash on goods and services that would improve his standard of living. This protectionist also believes that the automobile buyer is a gullible sucker or irresponsible fool for parting with cash in exchange for a good that she, the stranger, didn’t produce with her own two hands.
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