I had a post last week on CD about French economist Bastiat’s use of reductio ad absurdum (reduce to absurdity), a technique he used frequently in the mid-19th century to disprove and discredit the positions of his opponents by taking their unsound arguments to their logical, but often absurd and ridiculous conclusions. In his 1975 book Defending the Undefendable (full text available online here for free via Mises.org) economist Walter Block uses a reductio ad absurdum approach to very effectively expose the major flaw in the position of those who oppose free trade and free trade agreements, and who instead often support protectionism and other restrictions on international trade.
The text below is adapted from Chapter 23 (“The Importer”) of Walter’s excellent book in which he defended “the pimp, prostitute, scab, slumlord, libeler, moneylender, and other scapegoats in the rogues’ gallery of American society.” In the original version of the book in 1975, Walter focused on the aggressive advertising campaign of the International Ladies’ Garment Workers’ Union that was being implemented at that time to promote the struggling domestic garment industry against the rising tide of lower-cost imported clothing. I’ve taken the liberty of updating the text below with more contemporary references (emphasis added).
The position of many Democrats and union organizations like the AFL-CIO is that past trade agreements like NAFTA and now the proposed Trans-Pacific Partnership trade bill cause American jobs to be lost, displaced, and outsourced to countries like Mexico, Panama and Korea. On a superficial level, that argument seems plausible. After all, every toy, motorcycle, T-shirt or tomato that could have been produced domestically, but was instead imported, represents work that could have been performed by Americans. Certainly, this means less employment for American workers than would otherwise be the case. If the argument was limited to this aspect of trade, the case for the restriction, if not prohibition of imports, would be well-made.
The argument, however, is fallacious, and the consequences to which it logically leads are clearly unsound. The premise which opposes free trade and justifies protectionism on the national level also justifies it on the state level. We shall ignore the political impossibility (unconstitutionality) of one state setting up tariffs between it and other states. This is, after all, irrelevant to the economic argument of the anti-free trade advocates like many Democrats and the AFL-CIO. Theoretically, any one state could justify its policy in exactly the same way that a nation can. For example, the state of Montana could bar imports from other states on the grounds that they represent labor which a Montanan could have been given but was not. A “Buy Montana” program would then be in order. It would be just as illogical and unsound as any “Buy American” campaign.
The argument, however, does not end at the state level. It can, with equal justification, be applied to cities. Consider the importation of a baseball glove into the city of Billings, Montana. The production of this item could have created employment for an inhabitant of Billings, but it did not. Rather, it created jobs, say, for the citizens of Roundup, Montana, where it was manufactured. The city fathers of Billings could take the AFL-CIO’s anti-trade position and “patriotically” declare a moratorium on trade between the citizens of their city and the foreign economic aggressors in Roundup. This tariff, like those of the larger political subdivisions, would be designed to save the jobs of the citizens.
But there is no logical reason to halt the process at the city level. The anti-trade thesis can be logically extended to neighborhoods in Billings, or to streets within neighborhoods. “Buy Elm Street” or “Stop exporting jobs to Maple Street” could become rallying cries for the protectionists. Likewise, the inhabitants of any one block on Elm Street could turn on their neighbors on another block along the street. And even there the argument would not stop. We would have to conclude that it applies even to individuals. For clearly, every time an individual makes a purchase, he is forgoing the manufacture of it himself and outsourcing its production. Every time he buys shoes, a pair of pants, a baseball glove, or a flag, he is creating employment opportunities for someone else and, thereby, foreclosing those of his own. Thus the internal logic of the protectionist argument leads to an insistence upon absolute self-sufficiency, to a total economic interest in forgoing trade with all other people, and self-manufacture of all items necessary for well-being.
Clearly, such a view is absurd. The entire fabric of civilization rests upon mutual support, cooperation, and trade between people. To advocate the cessation of all trade is nonsense, and yet it follows ineluctably from the anti-trade and protectionist positions. If the argument for the prohibition or restrictions of trade at the national level is accepted, there is no logical stopping place at the level of the state, the city, the neighborhood, the street, or the block. The only stopping place is the individual, because the individual is the smallest possible unit. Premises which lead ineluctably to an absurd conclusion are themselves absurd. Thus, however convincing the protectionist, anti-trade arguments might seem on the surface, there is something terribly wrong with them.
MP: Even though Walter’s book is now 40 years old, his strong defense of free trade and complete take-down of protectionism above is as fresh and compelling today as it was in 1975; just like Bastiat’s economic wisdom from the mid-1800s is timeless, and remains as relevant today as it was more than 150 years ago.
Q: How convinced are economists as a group of the benefits of free trade in general and the benefits of free trade agreements in particular?
A: Pretty strongly convinced, according to this University of Chicago survey of 42 top economists. In response to the statement “Past major trade deals have benefited most Americans,” 93% of the economic experts agreed (weighted by their confidence on a scale from 1 to 10), and none disagreed (7% were uncertain). Ht/Jon Murphy
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