- Elgar original reference
Edited by William F. Shughart II and Laura Razzolini
Chapter 30: The international economy in public choice perspective
Charles K. Rowley 1 Introduction One of the most important paradoxes in late twentieth-century economics concerns the marked discrepancy between theory and practice in the realm of international trade. Like the infamous guns of the French Maginot Line, the guns of economists point in one direction, in this case almost unequivocally defending the comparative advantage theory of international trade. In so doing, these guns, like those of France at the outbreak of the Second World War, apparently point in the wrong direction. The policies of all nations ignore the lessons of economics and endorse signiﬁcant protection of domestic industries against the wealth-enhancing forces of free trade. The question addressed in this chapter is why democratic nations should impoverish the citizens they supposedly represent with policies that no economist of merit can or will endorse with reasoned analysis. The explanation of this apparent paradox is not a pretty one. By this stage, readers of the Companion will already understand why public choice sometimes is referred to as the most dismal component of the dismal science of economics. This chapter does little or nothing to relieve the pessimistic view of Adam Smith that ‘there is a great deal of ruin in a Nation’.1 Rather it demonstrates that the political ruin even of once great nations (to say nothing about those nations that are not and probably never will be great) does not stop at the national borders, but rather intensiﬁes as it reaches out into the international arena. 2 The...
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