I have just recently been through the back-to-school rethinking of issues of teaching and learning for my economics courses. In the process, I came upon a quote by Dudley Field Malone that I found intriguing: “One good analogy is worth three hours discussion.” It got me thinking of analogies and their power to allow people to “see” many things more clearly.
That led me to search out what other insightful people have said about analogies, including some I found very powerful. For example, Douglas Hofstadter wrote that “All meaning comes from analogies.” Albert Einstein wrote “The analogy I like is this: Imagine being able to see the world but your are deaf, and then suddenly someone gives you the ability to hear things as well — you get an extra dimension of perception.” Jacob Bronowski wrote, “at the basis of human thought lies the judgment of what is like and what is unlike.” And Steven Jay Gould wrote that “If genius has any common denominator, I would propose breadth of interest and the ability to construct fruitful analogies between fields.”
Those people and others provide a lot of meat to chew on (analogy intended). And Gould’s quote about the relationship between genius and fruitful analogies made me think of one of the most important economists in 19th century America — Henry George, who relied heavily on analogies.
In particular, in his 1886 “Protection or Free Trade?,” reportedly Milton Friedman’s favorite book on international trade, George used two powerful analogies in a devastating critique of the arguments of trade protectionists. He used an analogy to war to show what trade was unlike (he called trade “the extinguisher of war”), paired with an analogy to the body, particularly the circulatory system, to show what trade was like, creating a tag team that revealed the folly of protectionism from both ends.
While that was long ago, the distorted claims of special interests still befog most people’s understanding of the logic of voluntary arrangements that make up free trade. In a far from free or free trade world, Henry George’s analogies merit remembering.
Trade, Protection And War
It is not from foreigners that protection preserves and defends us; it is from ourselves. Trade is not invasion. It does not involve aggression on one side and resistance on the other, but mutual consent and gratification … what was done was not to force the people to trade, but to force their governments to let them.
Trade does not require force. Free trade consists simply in letting people buy and sell as they want to buy and sell. It is protection that requires force, for it consists in preventing people from doing what they want to do.
Protective tariffs are as much applications of force as are blockading squadrons, and their object is the same – to prevent trade. The difference between the two is that blockading squadrons are a means whereby nations seek to prevent their enemies from trading; protective tariffs are a means whereby nations attempt to prevent their own people from trading. What protection teaches us is to do to ourselves in time of peace what enemies seek to do to us in time of war.
Can there be any greater misuse of language than to apply to commerce terms suggesting strife … Goods! What are they but good things – things we are all glad to get?
Is it not preposterous to talk of one nation forcing its good things upon another nation? Who individually would wish to be preserved from such invasion? … who would take it kindly if any one should assume to protect him by driving off those who wanted to bring him such things?
When in the common use of the word we speak of individuals or communities protecting themselves, there is always implied the existence of some external enemy … disposed to do what the protected object to … What [trade restrictions] defend a people against is not external enemies or dangers, but what that people themselves want to do.
Trade And The Social Body
That power of the whole … lodged in governments is limited in its field of consciousness and action much as the conscious will of the individual is limited … There is, beyond national direction and below national consciousness, a life and relation of parts and a performance of functions which are to the social body what the vital processes are to the physical body.
What would happen to the individual if all the functions of the body were placed under the control of the consciousness…is what would happen to a nation in which all individual activities were directed by government.
The effort of each to satisfy his desires with the least exertion, which is the motive of trade, is as instinctive and persistent as are the instigations which the vital organs of the body obey. It is not the importer and the exporter who are the cause of trade, but the daily and hourly demands of those…to whom trade carries that which they demand, just as the blood carries to each fiber of the body that for which it calls.
It is as natural for men to trade as it is for blood to circulate … finding in trade the possibility of social advance.
Thus the restrictions which protectionism urges us to impose upon ourselves are about as well calculated to promote national prosperity as ligatures, that would impede the circulation of the blood, would be to promote bodily health and comfort.
What any country ought to obtain in this way or in that cannot be settled by any Congress or Parliament. It can safely be left only to those sure instincts which … impel men to take the easiest way open to them to reach their ends.
To assert that the way for men to become healthy and strong is for them to … control the circulation of their blood by ligatures, would be not a whit more absurd than to assert that the way for nations to become rich is for them to restrict the natural tendency to trade.
In “Protection or Free Trade?,” Henry George used analogies to war and the human body to show that protectionism is “prevention by a people not of what others want to do to them, but of what they themselves want to do.” Using such analogies, he expressed the case for free trade in a way that anyone who cared to could understand. Unfortunately, the misunderstandings he addressed, reinforced by the favorites that benefit from them, have not been eradicated. They require re-educating people generation after generation. But there are few better places to start than George’s summary of how much good such government “protection” undermines.
Protection … protect[s] ourselves against something which offends no moral law; something to which we are instinctively impelled; something without which we could never have emerged from barbarism, and something which physical nature and social laws alike prove to be in conformity with the creative intent.
Gary M. Galles is a professor of economics at Pepperdine University.
If “trade” always involved self-interested individuals, “free trade” would work as the authors indicated. Unfortunately, governments for decades have been posing as promoters of “free trade” to pursue THEIR self-interested goals of power and control.
The worst example is Communist China. Every Chinese company is presumptively controlled by the government. That government has deliberately underpriced manufactured goods for decades with the clear intent (largely successful) to wipe out manufacturing businesses and whole industries in the free and mostly-free world.
Since the use of “analogies” is the subject of the article, here’s one:
Let’s assume that there are only two people and two products — Food, and Water.
Comparative advantage tells us that over time, the more efficient food producer will only produce food and the more efficient water producer will only produce water.
But what if the goal of one of the two producers is to eliminate (i.e., kill or control/enslave) the other? That producer will be sure to retain his ability to produce both products. Once he realizes that the other no longer has the capability of producing the other product, he can refuse to sell his primary product to the other producer. The other producer ultimately either dies of starvation or thirst, or is forced into becoming subservient to the two-product producer.
“Free” trade is only “fair trade” when the heavy hand of government isn’t distorting markets in some way — which is all too rare. Completely abandoning industries because “the other guy” can make things cheaper has in many cases turned out to be a huge mistake.