14
Oct
10

Boudreaux contra protectionism

A bit much “for the children” in it, but pithy and to the point:

Rejecting Jeff Jacoby’s argument for free trade, John Schreiber writes “Does he [Jacoby] want his kids to be greeters at Wal-Mart selling cheap Chinese goods or to be engineers or scientists designing a new product?  That choice is easy for me” (Letters, Oct. 12).

Mr. Schreiber has matters backwards.  By buying products such as textiles, footwear, and luggage from China and other foreign countries, workers and resources in America are freed to work in fields such as bioengineering and artificial intelligence.

If we prevent the importation of “cheap Chinese goods,” we’d thereby promote in America industries that produce – what? – cheap American goods.  How bleak.  We Americans would pay higher prices for cheap goods and, more importantly, be denied many of the cutting-edge and challenging career opportunities that Mr. Schreiber and I (and, I’m sure, Mr. Jacoby) want for our children.

People (okay, populists, but technically they’re still people) seem to have this strange idea that manufacturing’s an abstract black-box wealth-distribution machine.  Savour the irony: manufacturing is about making stuff, but in the populist-magic model manufacturing never makes wealth.  Foreign manufacturing is evil and exploitative, and steals wealth from Honest Domestic Workers who have to abase themselves at Walmart rather than, uh, take jobs outside the manufacturing sector we putatively don’t have.  Domestic manufacturing is healthy and upstanding, and acquires for “us” enough wealth that our kids can work outside of the domestic manufacturing sector.

Why we’re not as evil for manufacturing goods at the putative expense of the Chinese as they are for vice versa is somewhat obscure, but I’m sure it has nothing at all to do with racism.  Why British Columbia isn’t suffering horribly for its trade deficit in beef to Alberta, or Alberta for its trade deficit in pot to British Columbia, is likewise obscure — unless borders between countries are pure fucking magic while borders between provinces are mere agreements between bureaucracies.

Here’s how it really works.  I write software and turn it into beer by the simple expedient of a medium of exchange.  I’m better at writing software than the people at Staropolskie Zlote; they’re better at brewing beer than I am; and the captain of the container ship that transports the latter from them to me is better at piloting a container ship than either of us.  By playing to our strengths

Comparative advantage: it works, bitches!

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3 Responses to “Boudreaux contra protectionism”


  1. 1 Not Sure
    October 14, 2010 at 18:28

    “John Schreiber writes “Does he [Jacoby] want his kids to be greeters at Wal-Mart selling cheap Chinese goods or to be engineers or scientists designing a new product? That choice is easy for me.”

    What makes Mr. Schreiber think his (or anybody else’s, for that matter) kids are necessarily going to be the engineers and scientists in his scenario, and not the factory workers?

    • October 15, 2010 at 17:39

      Good question — especially given that he’s agitating for more investment in manufacturing at the expense of, say, design. The two don’t go hand in hand: Apple, for example, designs their stuff in-house and contracts to have it manufactured in the PRC.

      • 3 Not Sure
        October 15, 2010 at 22:25

        I don’t know if you have kids (I don’t), but my experience has been that every parent thinks their child is special. There’s *no way* their kids will end up in dead-end menial jobs, even if they continue to complain about those good paying manufacturing jobs being sent overseas.

        I know that sort of logic doesn’t make any sense- I quit trying to understand it a long time ago.


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