On Protectionism and the Dignity of Protected Workers

(Don Boudreaux)

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Several people have written to challenge two letters of mine from yesterday – this one, and even more this follow-up one – in which I argued that workers in industries protected by tariffs should feel ashamed because their protection enables them to get paid for doing tasks that are less productive than would be the different tasks that would be done absent the protection.

The principal complaint about my letter is that it’s written by a state employee – me – who receives an annual income that consists of a substantial amount of dollars taken from taxpayers. This complaint is justified and fair.

The easy answer for the typical economist in my shoes is one that I reject, but it warrants mention. It’s this: The economic theory justifying state provision of education is that education is a “public good” that would be undersupplied absent government subsidization. In contrast, protective tariffs – as opposed to tariffs meant to raise revenue, as well as tariffs meant to ensure adequate national defense – have no such justification. Other than the so-called “optimal tariff” (which few economists believe to have little real-world relevance), there is no economic theory available to justify protective tariffs. Economic theory no more justifies protective tariffs than it justifies allowing, say, blue-eyed males between the ages of 14 and 23 and of Scandinavian descent to legally pick pockets. Protective tariffs are special-interest devices meant simply to artificially enrich politically powerful producers by protecting them from competition.

As I say, however, I reject this “public-goods” justification of government provision of, or subsidization of, education. I believe it is wrong, and I’m not proud that part of my income comes from funds extracted from taxpayers. In my ideal world, people – including professors at state schools – would feel ashamed of benefitting from such government action.

So why do I continue to work at George Mason University, a school owned and operated by the State of Virginia? My answer is that I’m imperfect. I could plead – truthfully – that I don’t make the rules. I can also honestly say that if I could do so I’d abolish all taxpayer support for all higher education, including government-subsidized student loans – loans that inflate my income. So not making the rules, I must play by the ones that large numbers of my fellow citizens find to be acceptable.

Where to draw the line on following rules that I, as an individual, would not choose but that are supported by others? A line must be drawn somewhere. Many years ago when my father was laid off for a long stretch from his job at the shipyard, my parents refused government welfare payments when they were eligible to receive such payments, yet my father worked in a shipyard that benefitted both from government contracts and from the cronyist Jones Act. (I should add that my parents’ refused to accept welfare payments not so much because they were opposed to the welfare state – although they were no great supporters of it – but because they would simply have felt personally ashamed to be on the dole. It was their horror of feeling shame that caused them to refuse welfare. This sense of shame for being on the dole is, I believe, admirable. I am very proud to have parents who felt this way.)

I have no good answer on the line-drawing question. I am, I admit, hypocritical for working for the state while believing that state-run education is wrong. But I believe that nearly everything done by government is wrong. Living for me would be nearly impossible were I to avoid receiving any benefits, such as those from driving on public roads, from government.

Nevertheless, I do wish that many more of my fellow Americans would feel shame at working for government. Such shame would reduce the government’s size and scope – an outcome that I believe would be both economically and ethically advantageous.

As for workers in protected industries not themselves being the instigators of protectionism, I agree – mostly. Some workers, especially through labor unions, lobby for protection. But I here put those workers aside.

It’s true that a worker – call her Smith – who merely works in a protected industry without awareness of the protection has less to be ashamed of than does a worker – call him Jones – who actively supports protectionism. In my ideal world, however, both the Joneses and the Smiths would feel embarrassed by what they do.

Whether or not a worker is aware that he or she benefits from protection, the following is indisputably true: That worker is misled if he or she is told that protection renders him or her a productive member of society. That worker is misinformed by intellectuals or politicians who portray protectionism as a means of giving that worker the dignity of being useful to society. Protectionism is a means of forcing consumers and taxpayers to pay workers to continue to produce outputs that consumers and taxpayers would not pay for voluntarily. There should be no dignity in holding a job that exists only because government compels other people to support it.

…..

The ultimate purpose of my two letters was to expose the intellectual flaw in Oren Cass’s argument that protectionism is a means of enabling workers to gain or maintain dignity. That many, perhaps all, protected workers feel dignity by working in their protected jobs is true enough. But that this feeling is rooted in a foundational misunderstanding is equally true. Protectionism is a means of making workers less productive to their fellow human beings; it is a means of forcing fellow human beings to pay for protected-workers’ special privileges. Attempts, such as those of Oren Cass, to paint protectionism as a means of restoring dignity to workers by making them useful to their fellow human beings are, thus, rooted in economic misunderstanding – a misunderstanding that should be exposed.