Friday, March 11, 2011

Another Don Boudreaux Karate Kid Crane Kick

Of all the anti-protectionist slapdowns Don Boudreaux has ever issued, this is my favorite:

9 March 2011

Mr. Ian Fletcher

Dear Ian:

In your latest essay at the Huffington Post you state that sensible protectionists, like you, want to use tariffs to protect, not “dying” industries, but, rather, only industries of “the future” (“Protectionism of the Past vs. Protectionism of the Future,” March 9).

Who but a backwoods bumpkin doesn’t cheer for the industries of “the future”? But I’ve some questions.

- How do we identify such industries? Who’ll be charged with determining which industries are of “the future” and which industries are sufficiently passé as to be left unshielded from being slain by foreign competition – slayings that you suppose are the inevitable fate of all U.S. industries not protected by high U.S. tariffs?

- What criteria will be used to distinguished industries of “the future” from what I suppose we ought to call “industries of the past”? Rates of return on capital? Total volume of employment? Productivity per worker? Rates of annual productivity growth? Rates of export growth? Total amount of corporate taxes paid? The technological ‘wow-ness’ of the industries’ outputs – as determined, perhaps, by the amount of positive attention such outputs receive from nightly network news reporters? The age of the industry?
Oh! I know the answer: total dollar amount of contributions to the political campaigns of incumbent members of Congress and the U.S. presidency.

Ok, here comes the Don Boudreaux Karate Kid Crane Kick, the takedown, the crushing blow:


- In those inescapable instances when dispassionate minds, such as yours, discover that protection was mistakenly given to industries of the past that were for a time wrongly thought to be industries of the future, will the shareholders and workers in those industries, whose prosperity has for a long time been made possible only by the tariff protections that their industries received, gracefully accept the revised determination that they have all along been investing in, and working for, industries of the past and, therefore, must now lose their assets and jobs for the greater good? What will you tell these poor workers, shareholders, and bondholders?

- Finally, if an industry really does have such a promising future that even government bureaucrats recognize this promise, why wouldn’t this same promise be recognized by private investors? Seems as though it would. And private investors, then, will pour sufficient amounts of private financing into this industry. Isn’t it one of the central functions of private capital markets to identify – and to shower with liquidity – upstart firms that are likely to be parts of industries of “the future”?

I’m eager to receive your replies.

Sincerely,

Donald J. Boudreaux

Hit the link at the top to read his readers' comments, involving Godzilla, Bambi, priests, and some discussion about failed "Industries Of The Future". 

4 comments:

Dave Killion said...

I am almost entirely with you on your admiration of Thomas Sowell, except that I hold Don Boudreaux in equally high esteem.

http://www.libertarianbookclub.com/

The Whited Sepulchre said...

Boudreax's colleague Russ Roberts is up there also. And Walter Williams, who teaches just down the hall.

Stephen M. Smith said...

Obviously the U.S. steel industry merits protectionist tariffs. I expect great things...eventually. It shouldn't take more than a couple centuries before it's up and running on its own.

Nick Rowe said...

But for lack of government investment, I'd have that helicopter-car in my driveway just like the one in the book I read as a child about the 21st century.

We wouldn't have running water if it weren't for the Roman government building aqueducts.

We wouldn't have skyscrapers if Egyptian government didn't build obelisks and pyramids.

We wouldn't have illegal aliens if we built a Great Wall like China's government.

You'd protest the wheel if government came up with the idea first.

Damn you straight to Hell you libertarian Neanderthals!

Go read Hayek or something. Oh, and government protects his copyright.

[snark off]