How Liberty Upsets Patterns – Econlib

Applied to Protectionism

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

Here’s the insightful quote:

If it were possible to create a legislative scheme that perfectly embodied protectionist ideals for this country today, how long would it remain effective? Not even a week. With a population of 55 million spread across 3.5 million square miles, every day brings new communication channels, discoveries, inventions, and processes. The industrial landscape is in a state of perpetual evolution. If a precise system of protective taxes was achievable at any moment, how could Congress possibly keep pace with the ongoing changes and necessary adjustments? The idea is absurd and fundamentally flawed.

This line of thinking reminds me of a section in Robert Nozick’s Anarchy, State, and Utopia, titled “How Liberty Upsets Patterns.” Nozick argues that if distributionists successfully imposed their vision of ideal distribution—based on their own standards—it wouldn’t last long. People would begin spending on experiences, like attending a Wilt Chamberlain basketball game. As a result, Chamberlain would accumulate wealth, disrupting the initial distribution, while some attendees would end up with less than their original shares.

In essence, liberty disrupts established patterns.

Now, let’s consider a hypothetical scenario where Trump achieves his desired trade balance with every nation. (This is a grand assumption, given that Trump seems to aim for a zero trade balance with each country, which could either deter foreign investment in the U.S. or trigger an increase in American investments abroad. But let’s entertain this notion.)

Imagine a U.S. citizen opts to purchase more clothing from Vietnam. As they don these outfits, others take notice and also wish to buy them. Within months, our trade balance with Vietnam could tilt negative; we’re importing more than we’re exporting.

While this situation may not seem problematic, it poses a dilemma for proponents of rigid trade arrangements like Donald Trump.

Liberty disrupts patterns, including trade balances.