Quotation of the Day…
… is from page 9 of Douglas Irwin’s superb 1996 monograph Three Simple Principles of Trade Policy (link added):
[T]he Lerner symmetry theorem … is not just a hypothetical abstraction. If a government undertakes policies that systematically reduce the volume of imports, it also systematically reduces the volume of exports.
DBx: Serious question: Why do protectionists care only about the welfare of workers in protected industries and of shareholders of protected firms? Why do protectionists ignore, or at least discount, the welfare of workers who inevitably are harmed by protectionism, as well as the welfare of owners of firms that are so harmed?
Note that I here have in mind only workers and firm-owners in the home country. (By the way, one of the greatest but most devious P.R. coups pulled off by protectionists is the portrayal of the case for free trade as being grounded in a concern for foreigners. While I – an admitted “cosmopolitan” – am indeed concerned about the welfare of foreigners, even if I were a hyper-xenophobic and greedy nationalist I would support a policy of free trade because such a policy benefits my fellow citizens and me.)
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