Broken Windows, Broken Logic

Over at The Independent Institute, Scott Burns and I take aim, once more with feeling, at protectionism.

Here's a sneak peek:

When Secretary Lutnick gloats about bringing iPhone factories back to the U.S., he’s essentially bragging about creating jobs for glaziers by breaking the windows of our global supply chains. In literal terms, he’s boasting about diverting millions of U.S. workers away from higher-skilled jobs into low-skill assembly line jobs with much lower pay. That’s a tough sell to an American public that isn’t exactly pining for a return to the assembly line, as evidenced by the 500,000 domestic manufacturing jobs that U.S. employers can’t fill.

According to a Cato Institute study, 80 percent of Americans want more manufacturing jobs in the U.S., but 73 percent say they don’t want to work them. As the great economic thinker Dave Chappelle bluntly put it: “I want to buy iPhones, not make them!” Or, as another group of great economic thinkers put it, somewhat more abstractly: “What is desired is specialization in production but diversity in consumption.” 

Nineteenth-century economist Henry George brilliantly explained the self-defeating nature of protectionism by likening it to a self-imposed blockade: “protectionists seek to do to our own nation in times of peace what our enemies seek to do to us in times of war.” We can all agree that a naval blockade is an effective way to suffocate a rival’s economy (for evidence, see the Confederacy’s economic collapse during the Civil War or Germany’s during World War I). Why, then, would we ever think that cutting ourselves off from foreign trade by, in effect, imposing a naval blockade on our own citizens would be a recipe for prosperity? 

The first in a forthcoming series.

Read the rest of part one here.