The Adventures of Jonathan Gullible - Bastiat Institute

When our economies
are entwined we will
not fi ght.
Unknown
Two people who
exchange property
voluntarily are both
better off or they
wouldn’t do it.
Extract from
Jonathan’s Guiding
Principles
Chapter 5 • Candles and Coats
long as these jobs are protected, they will never
outgrow their need for protection. What makes
companies competitive is competition. If they
can’t compete, it would be better if they shifted
capital and labour into product lines where they
have an advantage over other markets.
Trade barriers in retaliation against another
country only injure the innocent. The home
country gains nothing by infl icting “reciprocal”
injury on their own citizens.
Exports: Why are a nation’s exports
uncompetitive? This is frequently because of
high taxes and burdensome regulations in
the exporting country, not because of strong
competition from abroad.
Protecting local industry slows competitive
innovations. It also leads to dependency on
politicians who hand out the protection.
Protecting “job and industry” by banning
“unfair competition” is very similar to the
argument that the tree-workers made against
“unfair competition” from labour-saving
inventions. When laws are passed to protect the
candle makers, coat makers, and tree workers
from competition, then consumers have to pay
more than what they otherwise would.
This hurts even those who gain from the
protection. In the long-run we all have more
to gain from free trade than from a policy of
protectionism.
Background
There was a time, in the history of Europe, when
there was a tax on windows. To avoid this tax
people boarded up their windows or walled them
up completely.
Quote from Bastiat’s famous Candle Makers’
Petition: “We candle makers are suffering from
the unfair competition of a low-priced foreign
rival. Our Customers desert us and related
industries are also injured.
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