Protectionism and affirmative action

This is my first post as a guest blogger on this site. Many thanks to Sasha for the invitation.
In Capitalism Magazine, Harry Binswanger writes that protectionism is unpatriotic:
Philosophically, Americanism means individualism. Individualism holds that one’s personal identity, moral worth, and inalienable rights belong to one as an individual, not as a member of a particular race, class, nation, or other collective.
But collectivism is the premise of “Buy American.” In purchasing goods, we are expected to view ourselves and the sellers not as individuals, but as units of a nation. We are expected to accept lower quality or more expensive goods in the name of alleged benefits to the national collective.

Trade with other nations (or other states, cities, neighborhoods, etc.) exists because somebody “out there” is selling stuff that, due to lower price and/or perceived higher quality, is more attractive than alternative goods available closer to home. Profits and losses inform sellers where resources should be allocated to reach maximum benefit. Protectionism restricts the individual’s right to conduct trade with whomever he or she desires, incites friction between different groups that might not exist otherwise, and it insulates “protected” sellers from the latter half of the resource allocation equation.
(Government subsidies also shelter sellers from the school of hard knocks that losses represent. If there had been a haberdashers’ subsidy in the middle of the previous century, Harry Truman may have never left the profession to eventually become President.)
If these arguments sound familiar, they should. Think about affirmative action. What’s the difference between college admission policies that “protect” blacks and Hispanics from their white and Asian competition, and steep tariffs that “protect” domestic firms from their foreign competition?
The issue of resource allocation involves not only determining and meeting customer demand but also discovering and engaging in what one does best. Every region and every individual has a comparative advantage, the former in terms of native geography, resources, culture, laws, etc., and the latter in terms of natural talents. The beneficiaries of protectionism and affirmative action tend to do just enough to get by, never realizing their full potential – and they and their would-be customers are poorer for it.

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