A Modern Moral Attrocity

Samuel Gregg post in Public Discourse (The Witherspoon Institute) HERE:

“Free Trade, utility, and the Good”, a response to Stefan McDaniel’s comments on Gregg’s “Free Trade”:

“No reasonable conception of the good can be limited to the economic realm, let alone utility. Unfortunately many contemporary economists do not see this, precisely because they are more-or-less utilitarian and positivistic in their outlook. In this regard, they differ from the founder of modern economics, Adam Smith. This much is evident from reading the corpus of Smith’s works, which traverse jurisprudence, philosophy, astronomy, and rhetoric, as well as economics. But while prepared to countenance particular forms of protectionism in a very small number of instances, Smith was not convinced that significant restrictions of trade within and between nations would help facilitate human flourishing within communities. Neither am I.”

“As a form of economic and social organization, guilds often began with a concern to produce a certain product of a certain quality. But they invariably became preoccupied with determining who could and could not engage in certain occupations or produce certain goods and services. Being what we would call today “closed shops,” they disliked free trade and competition—domestic or foreign—because it threatened their monopolies and often made available to consumers better, newer, and less-expensive products than those produced by guilds. A similar logic was recently at work with the recent effort of organizations such as the United Steelworkers to persuade the Obama Administration to raise tariffs on Chinese-made tires for the next three years.

The same insularity encouraged by various forms of protectionism also actually discourages nations from worrying about other countries’ economic problems. A good example is the fierce resistance of European and American farming lobbies to permitting developing countries wider access to European and American markets. Many developing nations would escape their poverty far more quickly if the highly protected American and European agricultural markets were “de-insularized.” But this would mean removing the legal and economic privileges presently accorded to many American and European farmers. They will never give up these privileges without a fight, no matter how much such measures impede developing countries’ emergence from poverty…

Smith was deeply conscious of the moral challenges posed by the emerging commercial society of his time. Rather than seeking to resolve real and imagined conflicts between human flourishing and market-oriented economic development through government intervention, however, Smith sought to achieve a similar end through infusing this new society with a synthesis of commercial, classical, and Christian virtues. As Ryan Patrick Henley illustrates in his excellent book, Adam Smith and the Character of Virtue (2009), Smith was convinced that human flourishing was possible for people living in modern commercial societies that embraced free trade with relatively few caveats. So am I.”

Comment
I agree with much of Samuel Gregg’s post. Particularly, the moral attrocity of the European and US protectionist policies against the poor world's agriculture. It's also bad long-term political eocnomy.

I recommend that you follow the link and read it.

Ryan Patrick Henley is a foremost US authority on Smith’s Moral Sentiments (I have heard him lecture twice on TMS and on both occasions was impressed by his authoritative content and his excellent communication style). I await high expectations the arrival of his new book, Adam Smith and the Character of Virtue, 2009.

Don Boudreaux Demolishes Protectionist Author

As if on cue, following the previous post, my question about which Adam Smith Chicago or Kirkcaldy is challenged is partly answered by Don Boudreau of Café Hayek HERE: under “Witless on Trade”

Don Boudreaux writes many of the best, brief, articles on free trade and competition in the main stream media today (that is, when his witty letters are published by the editors).

Consider this one, which he sent to the Financial Times (15 September):

“According to Mr Prestowitz, the case for free trade relies on the validity of “the assumptions that the markets are perfectly competitive, that exchange rates are not manipulated, that there are no economies of scale, that there is no cross-border investment or cross-border transfers of technology, and that there are no government subsidies or export requirements.”

But with the possible exception of the assumption about economies of scale – an assumption that even its notable champion, Paul Krugman, regards as being academic rather than practical – the case for free trade in no way depends upon any of these assumptions. For example, although free-trader Adam Smith well understood competition, he never heard of “perfect competition” (as the model wasn’t developed until the 1930s). And even if he had heard of this model, Smith would have understood that free trade’s benefits are positive even when industries are not (as they never are) ‘perfectly competitive.’ (The supermarket down the street from me doesn’t compete in an industry that’s ‘perfectly competitive,’ yet I gain every time I choose to trade with it – as I frequently do.) …

… Not a thing in Mr Prestowitz’s poorly reasoned, factually inaccurate, and economically uninformed essay justifies Uncle Sam’s efforts to penalize American consumers who wish to purchase imports from China.”

Comment
Donald J. Boudreaux produces similar brief rebuttals to protectionist propaganda regularly and I recommend that you bookmark Café Hayek and scan his posts for excellent economics (and a good knowledge of Adam Smith too).