Undercover Economist

Not much, opines Steve Landsburg:

One way to think about that is to ask what your moral instincts tell you in analogous situations. Suppose, after years of buying shampoo at your local pharmacy, you discover you can order the same shampoo for less money on the Web. Do you have an obligation to compensate your pharmacist? If you move to a cheaper apartment, should you compensate your landlord? When you eat at McDonald’s, should you compensate the owners of the diner next door? Public policy should not be designed to advance moral instincts that we all reject every day of our lives.

In what morally relevant way, then, might displaced workers differ from displaced pharmacists or displaced landlords? You might argue that pharmacists and landlords have always faced cutthroat competition and therefore knew what they were getting into, while decades of tariffs and quotas have led manufacturing workers to expect a modicum of protection. That expectation led them to develop certain skills, and now it’s unfair to pull the rug out from under them.

Once again, that argument does not mesh with our everyday instincts. For many decades, schoolyard bullying has been a profitable occupation. All across America, bullies have built up skills so they can take advantage of that opportunity. If we toughen the rules to make bullying unprofitable, must we compensate the bullies?

I broadly agree but I am not nearly so sure of myself.

I am aware that John Stuart Mill is in the opposing camp here. He argued that when slavery (which he opposed) was abolished, the slave-owners were entitled to compensation because they had built their businesses on a system of laws that suddenly changed. I do not know what to make of that argument, but it does point to a way in which the bullying analogy fails: bullies are not encouraged by society, even if one might argue that they should be discouraged even more.

A separate argument: people lose their jobs all the time for reasons that have nothing to do with foreign trade. I’d argue that they deserve some help. Why are jobs lost to foreign competition so privileged?