I was having a polite conversation with someone today when they mentioned that protectionism, unlike free trade, creates jobs and prosperity by shutting off competition to domestic firms and workers. If Japan didn’t make cars, my peer argued, then jobs would spring up in Great Britain (or America) to make those cars. Quite low hanging fruit, I have to say.
I’d like to exclusively address the gains from free trade from comparative advantage. And rather than go over an economics lesson, I’ll make reference to Frederic Bastiat‘s tongue-in-cheek “candlestick maker’s petition”. In it, Bastiat argues from the point of view of a candlestick maker that a competitor is “flooding the domestic market with an incredibly low price” and that eliminating this competitor will encourage growth in other industries.
The competitor he is talking about is the sun. If the government managed to block out the sun, protectionists could argue, industries will have to fill in for the resources the sun provided:
If France consumes more tallow, there will have to be more cattle and sheep, and, consequently, we shall see an increase in cleared fields, meat, wool, leather, and especially manure, the basis of all agricultural wealth.
If France consumes more oil, we shall see an expansion in the cultivation of the poppy, the olive, and rapeseed. These rich yet soil-exhausting plants will come at just the right time to enable us to put to profitable use the increased fertility that the breeding of cattle will impart to the land.
The “petition” points out, pretty well I might add, the absurdities of thinking that eliminating competition is good for the general welfare of society.
Read all of Bastiat’s Petition here.