A Logical Fallacy Behind Tariffs

Donald Boudreaux adroitly punctures a popular misconception -- unfortunately shared by Donald Trump -- about tariffs in his piece, "Protectionism and the Fallacy of Composition."

The brilliance lies in how he introduces the logical fallacy to his readers, who may be even less familiar with it than they are with economics:

This fallacy is committed whenever someone concludes that that which is true for a part of the group is necessarily true for all of the group. The classic example is standing up in a stadium to get a better view of the game. If one or a small number of people stand up, these folks do indeed enjoy a better view. But obviously it's mistaken to conclude that "therefore, if everyone stands up, everyone will get a better view."

This analogy instantly illuminates the logical fallacy, as well preemptively conceding the fact that tariffs do, in fact, comparatively benefit some participants in an economy.

In the rest of his piece, Boudreaux uses the fallacy to show that tariffs are harmful -- twice:

A second way in which the standing-up-in-the-stadium analogy illuminates some problems with protectionism is this: Just as it's foolish to conclude that, because a few people in the stadium are made better off by standing up, everyone in the stadium would be made better off if everyone stands up, it's foolish to conclude that, because one or a handful of producers are made better off by being awarded protection from imports, everyone in the country would be made better off if everyone received such protection.

Boudreaux admits his analogy isn't perfect, but also shows that the imperfection does not harm his case.

Whether you're unsure about the merit of tariffs yourself, or you're having trouble making headway in discussions about this once-dead topic, you could do worse than this 1000-word essay as a primer.

-- CAV