Compensating Thieves for Taking Back Our Property
“Compensating Variations” by Alex Tabarrok says something sensible on the subject of the immorality of compensating workers for the lifting of the trade barriers with which they had long been looting their fellow citizens:
The British Parliament was debating how much slave owners should be compensated for their losses, 20 million pounds as it turned out, when a furious John Stuart Mill rose to his feet thundering, “I should have thought it was the slaves who should be compensated.”
I am reminded of this story, which is probably apocryphal, whenever I hear about how we must compensate “the losers” from globalization. Really? Why should they get any compensation at all?
Imagine that transportation costs fall so that Joe buys his shoes from China. Why do lower transportation costs impose an obligation on Joe to compensate Mary, a U.S. shoe maker? If transportation costs rise (say because the price of oil increases) does Mary have an obligation to compensate Joe?
Or imagine that tariffs have long protected the shoe industry and now the tariffs are lifted allowing Joe to save some money. Why does this impose an obligation on Joe to compensate Mary? Indeed, shouldn’t Mary have to compensate Joe? After all because of the tariffs for many years Joe had to labor extra hours to buy shoes - shouldn’t Joe be compensated for this injustice?
August 5th, 2007 at 7:45 am
How much should academic economists pay us, now that it’s possible to offshore their work?
August 5th, 2007 at 7:56 am
There have never been any government prohibitions on importing economic services from abroad. We don’t owe our high wages to tariffs, so we don’t owe a political debt.
There’s been prohibition of importing the economists themselves ( immigration laws), but that doesn’t seem to have been binding on economists– lots of academic economists are foreign. My department of 12 has 4, which is not unusual. If we banned import of economists, our wages would be higher. Of course, there is lots of demand overseas for American economists, so overall we probably gain from trade.