Protectionist Poison
Posted: 07 Jun 2010 05:29 PM PDT
Here's a letter to the Wall Street Journal:
Clyde Prestowitz asserts that "A decline in U.S. imports from China would lead to an increase in U.S. domestic output and thus an increase in employment and wage gains both as a result of unemployed workers starting to work again and as a result of upward pressure on wages generated by increasing labor scarcity" (Letters <http://online.wsj.com/article/SB10001424052748703561604575282801343000896.html?KEYWORDS=Prestowitz> , June 7).
If Mr. Prestowitz were unemployed, would he practice the protectionism that he preaches? Specifically, would he impose restrictions on imports from outside of the Prestowitz household? By no longer buying food from Safeway and clothing from The Gap, Mr. Prestowitz would have to produce these things himself. So the formerly unemploymed Mr. Prestowitz would find himself occupied with all sorts of jobs, each of which (according to his theory) would compensate him lavishly.
In reality, of course, protectionism is poison. The Prestowitz household would suffer immeasurably were it to practice the faulty economics peddled by Mr. Prestowitz. The fact that this poison is diluted when ingested on a national scale - thus making its ill-consequences less readily seen than in the case of a single household - doesn't transform this poison into a magical economic elixir.
Sincerely,
Donald J. Boudreaux
http://www.cafehayek.com/
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