Economic Sophisms/36
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IT has been said ... but in case I should be accused of putting sophisms into the mouths of the protectionists, I shall allow one of their most vigorous athletes to speak for them.
"It has been thought that protection in our case should simply represent the difference which exists between the cost price of a commodity which we produce and the cost price of the same commodity produced by our neighbours.… A protective duty calculated on this basis would only ensure free competition …; free competition exists only when there is equality in the conditions and in the charges. In the case of a horse race, we ascertain the weight which each horse has to carry, and so equalize the conditions; without that there could be no fair competition. In the case of trade, if one of the sellers can bring his commodity to market at less cost, he ceases to be a competitor, and becomes a monopolist.… Do away with this protection which represents the difference of cost price, and the foreigner invades our markets and acquires a monopoly."[1]
"Every one must wish, for his own sake, as well as for the sake of others, that the production of the country should be protected against foreign competition, whenever the latter can furnish products at a lower price."[2]
This argument recurs continually in works of the protectionist school. I propose to examine it carefully, and I solicit earnestly the reader's patience and attention. I shall consider, first of all, the inequalities which are attributable to nature, and afterwards those which are attributable to diversity of taxation.
In this, as in other cases, we shall find protectionist theorists viewing their subject from the producer's stand-point, whilst we advocate the cause of the unfortunate consumers, whose interests they studiously keep out of sight. They institute a