They will end by learning at their own expense that it is better to be subject to competition and face rich customers than to have a monopoly and be faced with a ruined customer base.
Part 6 of 7
Today’s quote follows a short fictional story describing the implementation of a protectionist regime on an island upon fallacious grounds. In this story the land owners get rid of foreign competition to the detriment of the population before discovering that the whole process is also detrimental to themselves. It reminds us of the fable of The Three Municipal Magistrates that describes the same phenomenon in more details.
What Frédéric Bastiat adds here is that, all considered, protectionism does not differ from communism in its principles and that this is the reason why it leads to misery. For those who still have some doubts about the relevance of the logic presented here, I can only invite them to confront this reasoning to their predictive value now that we have the hindsight of what happened in the 20th century and, closer to home, the latest such experience in Venezuela.
Other quotes from Baccalaureate and Socialism:
Part 1 of 7 – Part 2 of 7 – Part 3 of 7 – Part 4 of 7 – Part 5 of 7 – Part 6 of 7 – Part 7 of 7