To See or Not to See...

Steve Landsburg on the Unseen and bias (or ignorance depending on your take).

(HT: Cafe Hayek)

Is Protectionism Worse Than Racism?

This Steve Landsburg post got me thinking about the above question (note: I have not read the column the said post is based on). I think if you were to ask a random sampling of (reasonable) Americans if racism was "bad", they would almost all say yes. On the other hand, if you were to ask the same sample if protectionism was "bad", I wouldn't be surprised if it was split down the middle, or even in favor of "no". So why is this?

As Landsburg points, racism and protectionism are simply two forms of discrimination; one is based on, well, race, and the other regional affiliation. Now Landsburg claims that his analogy isn't perfect because protectionism by necessity forces itself to act on another. I don't think this is true as I believe one needs to clarify the setting in which the policy is practiced. For instance, if I was a regular person who happened to be a protectionist to the extreme, I would buy a parcel of land in Montana and fend for myself beholden to no one. If I was the same person, but a racist to, say black people, I would attempt to find a community where no black people would ever be found. I could see if Landsburg was making an opportunity cost argument about protectionism (my withdrawal from society takes my skills from society and thus forces more people to take up more of a burden, as well as takes away any potential benefits I may have provided), but I didn't get the impression that was what he was referring to. Besides, one could probably make a very similar argument about the effects of racial discrimination.

But I think the real issue at hand is it worse for government to be protectionist or racist. As government has a monopoly over the use of force, its actions in the area of discrimination are far more powerful than any private entity.

(Yes, I know if an influential CEO is a protectionist or racist he is going to affect a significant number of people with his discriminatory policies, but in his case it would be a trade-off as he would be enduring the cost of significantly limiting the size of his potential resource pool. Government faces no such cost).

So, is it worse for government to implement racist policies or protectionist policies?

It's a moot question in my opinion. Both are stupid policies, and both are immoral policies. I don't believe either provide any benefits (except to certain special interests, but that's a topic for another day).

Yet that brings us back to our second and third questions. Why would a majority of people say racism is a bad thing, but protectionism not? Is there a discernible difference between the two that makes one worse than the other?

My guess is that is a combination of our [American] view of American History as well economic ignorance.

Another Potential Book for Our Yet-To-Be-Established Book Club.

Slapped by the Invisible Hand: The Panic of 2007 by Gary B. Gorton.

Steve Landsburg sums up the thesis of the work here.