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Bonus Quotation of the Day…

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… is from page 79 of Pierre Lemieux’s excellent 2018 monograph, What’s Wrong With Protectionism?: There is no reason to believe that more market failures occur in international trade than in domestic trade. But even if, in special circumstances, a convincing case could be made for market failure, there is no reason to believe that politicians and bureaucrats (who, in practice, run the government) could provide an efficient solution. Even if those individuals were perfectly well intentioned, they are not omniscient and cannot comprehend the detailed complexity of the economy. They lack local knowledge about consumer preferences and the costs and opportunities of producers…. Political failures are likely to be more damaging than any market failure, as shown by historical attempts to

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… is from page 79 of Pierre Lemieux’s excellent 2018 monograph, What’s Wrong With Protectionism?:

Bonus Quotation of the Day…There is no reason to believe that more market failures occur in international trade than in domestic trade. But even if, in special circumstances, a convincing case could be made for market failure, there is no reason to believe that politicians and bureaucrats (who, in practice, run the government) could provide an efficient solution. Even if those individuals were perfectly well intentioned, they are not omniscient and cannot comprehend the detailed complexity of the economy. They lack local knowledge about consumer preferences and the costs and opportunities of producers…. Political failures are likely to be more damaging than any market failure, as shown by historical attempts to plan and control economies.

DBx: Yessir. And this same logic applies to government efforts to counteract real and imagined negative effects in the home country caused by foreign-government tariffs or subsidies or both. Government officials at home are not made more knowledgeable (or more saintly) simply by shifting the ostensible justifications for their actions from home-grown problems, or from problems not intentionally caused by humans, to problems allegedly caused at home by tariffs imposed, and subsidies dispensed, by foreign governments.

Yet scratch the surface of the arguments of all persons who insist that the home government must “retaliate” against foreign-governments’ tariffs and subsidies with tariffs and subsides of its own. You will find there, just beneath the surface, the implicit assumption that economic harassment by foreign-government officials of their citizens miraculously renders home-government officials sufficiently knowledgeable (and apolitical) to tax and subsidize in ways that are likely to improve the performance of the home-country economy.

This assumption, of course, is bizarre. But the case for home-country “retaliation” requires it.

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Don Boudreaux
He is a professor of economics at George Mason University in Fairfax, Virginia. Previously, he was president of the Foundation for Economic Education.

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