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Wednesday, May 10, 2017

Stop Calling Cronyism Protectionism

An open letter to the Wall Street Journal.

Here’s a letter to the Wall Street Journal:

Uncle Sam’s scheme to punitively tax Americans who buy low-priced lumber from Canada is yet another instance of what is commonly called “protectionism.” The term, of course, refers to the protection from foreign competition that tariffs and other import restrictions bestow upon politically powerful domestic producers. Yet “protectionism” – with the sweet sound of the verb “to protect” – is far too kind and inaccurate a word for this policy.

It’s too kind because it masks the reality that the protection given to domestic producers is an attack on domestic consumers. To protect with trade barriers the incomes of some of its subjects, government preys upon the incomes of other of its subjects. (And, by the way, economics is clear that the total value of the incomes lost to such government predation exceeds the total value of the incomes that are protected.)

The word “protectionism” is too inaccurate because it hides the scheme’s illogic. If “protectionism” worked as its champions claim, it enriches nearly everyone in the domestic economy not by increasing people’s access to goods and services, but by decreasing this access. Protectionism is the theory that people are made richer when the flow of goods and services available for their consumption is artificially slowed or when the cost of acquiring goods and services for their consumption is artificially raised. Protectionism is the bizarre notion that government-induced scarcity is really government-induced abundance.

So let’s make the language honest and more revealing. George Mason University economics doctoral student Jon Murphy proposes that we replace the misleading words “protectionism” and “protectionists” with the words “scarcityism” and “scarcityists” – words that better expose the true nature of government-erected obstacles to people’s access to goods and services.

Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030

Reprinted from Cafe Hayek.

  • Donald J. Boudreaux is a senior fellow with the F.A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics at the Mercatus Center at George Mason University, a Mercatus Center Board Member, and a professor of economics and former economics-department chair at George Mason University.