Donald Boudreaux on protectionism

It’s easy to understand, and excuse, intellectually unengaged people falling for protectionist fables.  And there’s certainly no mystery as to why business executives and politicians often endorse protectionist policies: protective tariffs and subsidies swell the wallets and purses of the executives, and enhance the electoral prospects of the politicians.  But it’s always baffled me that protectionism is championed by so many learned and intellectually active people who have nothing personally to gain from protectionism. 

After all, the argument against protectionism is, as they say, not rocket science.  Indeed, it can be grasped by a reasonably alert eighth grader: because the very essence of protectionist policies is to forcibly reduce the supplies of goods and services available in the home country, protectionism reduces the quantity of goods and services available, on average, for each citizen of the home country to consume.  Protectionism makes people in the home country poorer than they would be otherwise. 

Although the argument against protectionism is simple, some intellectual effort is required to understand the fact that imports do not increase overall unemployment in the home country.  A few moments of cogitation are necessary to grasp the reality that imports are not gifts, but instead represent foreigners’ demands for our exports or to invest in our country.  Some thought deeper than the surface must be made to understand that when we import more, we either export more, or we witness the capital stock of our country growing larger than otherwise, and both of these outcomes create jobs to offset the jobs that are “destroyed” by imports.

~ Donald J. Boudreaux, "The Libido for the Superficial," American Institute for Economic Research, December 8, 2022