Tuesday, April 27, 2010
It took a few moments to tease out an argument and orient myself to Bastiat’s approach and style, but I gather that he is quit the champion of free trade and competition, and a rabid opponent of protectionism. However, these elements could easily be lost in his less then adept sophistry (which is actually just an elaborate version of sarcasm). I am sure in 1850 this had all the sting of a smack to the mouth, but today one can’t help but struggle with his rhetorical devises. Though in Bastiat’s defense, resurrecting a 2500 year old rhetorical technique does lend the comparatively new discipline of economics an air of ancient credibility and timeless wisdom. Anyway, here is the most compelling idea I find in Bastiat's writing as well as Landsburg's: an artificial disruption to the natural trade balance (i.e. allowing both sides to maximize their comparative advantage) has a multi-fold impact that reaches well beyond the parties directly involved. Foremost among them is the issue Landsburg brought up, that artificial protection of one part of the economy will invariably harm another—probably unpredictable—part of the economy. Furthermore, the harm may not be equalized to the extent of the protectionism, it may be many times more harmful. A secondary characteristic of protectionism is brought up by Bastiat, he finds it analogous to a swamp in the middle of the road. Sure goods will eventually make their way across the barrier, however the overall cost is considerably increased as well as an overall decrease in efficiency.