Quote of the day X2…

In his classic work Economics in One Lesson (an accessible book that anyone desiring a clean, clear, unbiased view of how the economy works owes it to him/herself to read), Henry Hazlitt addressed the unequivocally pernicious overall impact of tariffs, and finds it paradoxical that anyone might find such commonsense paradoxical (which speaks to the power of political propaganda):

…what is clear is that the tariff—though it may increase wages above what they would have been in the protected industries—must on net balance, when all occupations are considered, reduce real wages—reduce them, that is to say, compared with what they otherwise would have been. Only minds corrupted by generations of misleading propaganda can regard this conclusion as paradoxical. What other result could we expect from a policy of deliberately using our resources of capital and manpower in less efficient ways than we know how to use them? What other result could we expect from deliberately erecting artificial obstacles to trade and transportation?

This morning Alan Greenspan, during a live Bloomberg Radio interview, said the following about the present political push (from, alas, both sides of the aisle) against international trade:

In international trade there is a net gain that occurs for the world as a whole as a consequence of that. And the only issue is who benefits the most and who benefits the least. And apparently there’s a very significant short-term disinterest in getting involved in this process. It’s wholly a political issue. It’s got nothing to do with economics, the economics are unequivocal; trade, especially global trade, is a positive for the global markets as a whole, and to the extent that everyone benefits from that is why it’s always been relatively popular over the generations.

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