Here's an excerpt from an old post by economist Don Boudreaux (via recent posts from Mark Perry and Scott Lincicome):
If it’s true that theory and evidence in favor of protectionism are sufficiently strong to warrant economists abandoning their conclusion that free-trade policy is generally sound, then why shouldn’t economists — led by [free trade skeptic] Dani Rodrik — also start exploring the potential benefits of intra-national protectionism? Surely a scholar not benighted with the free-trade "faith" ought to take seriously the possibility that, say, Tennesseeans could be made wealthier if their government in Nashville restricts their ability to trade with people in Kentucky, Texas, Rhode Island, and other states?
Indeed, such an objective scholar should be open also to the possibility that residents of Nashville can be made wealthier if their leaders restrict their ability to trade with people in Knoxville, Memphis, Chattanooga, and other locales in that state.
I suspect that if someone proposed to Dani Rodrik [or Ian Fletcher] that he explore the wealth-creating potential of state-level protectionism, he would refuse. He would likely (and correctly) say that it’s ridiculous on its face to suppose that such protectionism would make the people of Tennessee as a group wealthier over time. If my suspicion is correct, then to what would Rodrik himself attribute his out-of-hand dismissal of the notion that Tennessee tariffs might well make Tennesseeans richer?
I recently had a conversation with someone (not in the trade field) where I made this same point. He had argued for the benefits to the U.S. of protection against products from China, so I said, what about the benefits to people from Michigan from protection against imports from Tennessee? I don't think he had ever heard the argument before, and he didn't have a clear response. From what I could gather, the answer was that he cared more about the welfare of Americans than non-Americans. As a result, Michigan losing jobs to Tennessee was not that bad, but Michigan losing jobs to China was bad. I asked him why he cared more about people from Tennessee than people from China. I thought perhaps he would say that he knew people there. He didn't say that exactly, but my sense was that, in very general terms, he saw the issue in an "us" versus "them" sort of way. People from both Michigan and Tennessee are Americans whereas people from China are not, and we should favor the interests of Americans over those of non-Americans. He seemed a little thrown off when I put it this way, as if he did not want to think of it in these terms.
I don't know what this says about anything -- just thought it was interesting!
