How Liberty Upsets Patterns – Econlib

Applied to Protectionism

Don Boudreaux shared a thought-provoking quote on his CafeHayek blog today, taken from William Graham Sumner’s book Protectionism: The ‘Ism Which Teaches that Waste Makes Wealth. Sumner’s book is available for free on Liberty Fund’s site here.

The quote highlights the ever-changing nature of economies and industries, making it virtually impossible for any system of protective taxation to remain effective for long. As new technologies, innovations, and discoveries constantly shape the industrial landscape, attempting to regulate and adapt through legislation becomes a futile exercise.

This insight resonates with a concept discussed by Robert Nozick in his book Anarchy, State, and Utopia, where he explores how liberty disrupts established patterns of distribution. Nozick uses the example of Wilt Chamberlain, a basketball player who becomes wealthy through individuals freely choosing to pay to watch him play. This disrupts the initial ideal distribution envisioned by distributionists, showcasing how liberty can lead to unexpected outcomes.

Applying this idea to trade balances, let’s consider a scenario where a country aims for an ideal trade balance with each trading partner. However, as consumer preferences change and demand for products from a specific country increases, the trade balance may shift unexpectedly. Liberty allows individuals to make choices based on their preferences, resulting in dynamic and fluid trade relationships.

Donald Trump’s approach to trade, seeking to enforce strict trade balances with each country, overlooks the inherent nature of liberty to disrupt established patterns. As individuals exercise their freedom to trade and consume, trade balances naturally fluctuate, showcasing the complexity of global trade dynamics.

Ultimately, liberty upsets patterns, challenging rigid systems and highlighting the dynamic nature of economies and trade relationships.