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Don Boudreaux shines on trade…. again…. – Publications – AEI

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AEI Don Boudreaux shines on trade…. again…. A few new Don Boudreaux gems on free trade: 1. On how Protectionists/Scarcityists implicitly (or even explicitly) assume that domestic producers have a right to the property and patronage of domestic consumers, i.e., the right to engage in legal plunder by picking the pockets of consumers (emphasis original): To coherently make their case, protectionists must clear an ethical hurdle that is too seldom put before them – namely, they must justify their implicit assumption that domestic producers have a right to – a property in – the patronage of domestic consumers. Yet this assumption is nearly impossible to justify when stated explicitly and squarely. Does, say, Apple Inc. have a right to my patronage? Am I morally obliged to buy some minimum

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AEI
Don Boudreaux shines on trade…. again….

A few new Don Boudreaux gems on free trade:

1. On how Protectionists/Scarcityists implicitly (or even explicitly) assume that domestic producers have a right to the property and patronage of domestic consumers, i.e., the right to engage in legal plunder by picking the pockets of consumers (emphasis original):

To coherently make their case, protectionists must clear an ethical hurdle that is too seldom put before them – namely, they must justify their implicit assumption that domestic producers have a right to – a property in – the patronage of domestic consumers. Yet this assumption is nearly impossible to justify when stated explicitly and squarely. Does, say, Apple Inc. have a right to my patronage? Am I morally obliged to buy some minimum number of smartphones from Apple every few years? Does the lost revenue that my decision to stop using smartphones causes Apple to experience justify action by Uncle Sam to punish me? Is it ethically appropriate for Uncle Sam to punitively tariff my decision to stop using smartphones?

If you answer ‘no’ to these questions, you thereby admit that Apple has no right to my patronage. How, then, is it wrong for me to deny my patronage to Apple by purchasing a competing product that happens to be sold by a foreign firm? Apple has thereby lost nothing to which it had any ethical or economic right or claim. And this fact remains true even if the production of the imported smartphone that I choose to buy is subsidized by a foreign government.

2. On how to tell if you might be a Protectionist/Scarcityist:

If when learning that a little old lady on her way to the grocery store to buy lemonade was enticed instead to buy lemonade from a young girl selling low-priced lemonade that the girl’s mom made, you accuse the girl and her mom of practicing ‘unfair competition’ against the grocer – of committing an ethical offense against the local grocer – and then demand that the police officer extract from every buyer of the young-girl’s lemonade a punitive fine.

And let’s extend that case even further by assuming that the girl’s mother was “unfairly” subsidizing the production of the lemonade, such that the price charged by her daughter was below the actual cost of production. The ethical offense might be even greater and the punitive fine even larger due to “unfair dumping” and “unfair subsidies.”

Here’s my contribution….. another way to tell if you might be a protectionist/scarcityist:

If when learning that a little old lady is on her way to the furniture store to buy a new chair, she stops at a neighbor’s garage sale and finds a high quality used chair at a fraction of the price she intended to pay for a new chair, you accuse the neighbor of practicing “unethical and unfair competition” against the furniture store for “dumping” used furniture on the market at deeply discounted prices compared to prices for new furniture — and then demand the local police impose punitive taxes on every person who purchases used household goods from garage sales.

 

Don Boudreaux shines on trade…. again….
Mark Perry

Mark Perry
Mark J. Perry is concurrently a scholar at AEI and a professor of economics and finance at the University of Michigan’s Flint campus. He is best known as the creator and editor of the popular economics blog Carpe Diem. At AEI, Perry writes about economic and financial issues for American.com and the AEIdeas blog.

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