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

Donald Boudreaux on the minimum wage

If the case of raising the minimum wage even might destroy jobs for some of the workers that it's meant to help, what right have we to embark upon this policy?  I think none.   Remember, the people whose livelihoods are here being experimented with are low skilled workers.  They aren't doctors, lawyers, machinests, welders or college professors.  They're motel maids, fast food workers, teens just entering the workforce.   If minimum wage proponents are correct that no jobs are destroyed, then these workers are indeed benefitted without cost to them.  Although here there's a question of who pays the costs of these workers' gains and what is the moral reason for imposing that cost on those persons.  For example, if we all agree that all low skilled workers should be given raises, what's the moral justification for requiring only current employers of low skilled workers to pay these costs?  Why not pay these raises out of general revenues collected in taxes from the taxpaying population?  It's a question that I think should be asked, but it is seldom asked. 

But what if basic economics and the bulk of empirical studies are correct and minimum wage proponents are incorrect?  We then have a policy that not only prices some willing workers out of jobs - and again, also out of opportunities to get job experience, which helps these people to get even higher wages in the future - but a policy that also distributes its benefits to those who need those benefits the least, while it inflicts the bulk of its costs on those who can least afford such burdens.

~ Donald Boudreaux, "Against a $15 Minimum Wage," 10:05 mark, USD Center for Ethics, Economics and Public Policy, September 16, 2016

Robert Higgs and Donald Boudreaux on crises and the ratchet effect

To disable the ratchet effect, people must rouse themselves to think more seriously about the long-run consequences of actions taken hastily in response to national emergencies—and about whether they want to keep their remaining economic freedoms and civil liberties or be content to surrender them one crisis at a time.

~ Robert Higgs and Donald Boudreaux, "Past Crises Have Ratcheted Up Leviathan. The COVID-19 Pandemic Will Too.," Reason.com, May 1, 2020