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Source link: http://archive.mises.org/2588/a-relunctant-purist-bhagwati-on-trade/

A Relunctant Purist: Bhagwati on Trade

October 11, 2004 by

Jagdish Bhagwati is by no means a committed supporter of the free market. For him, restrictions on the right of labor unions to strike are little better than slavery. Further, he began his career as an international trade theorist by devising models in which free trade was not the best policy. Nonetheless, he has worked his way to becoming a committed supporter of free trade; and, in the two books we have here to consider, he refutes a large number of fallacious arguments in favor of trade restrictions. [Full Article]

{ 4 comments }

bkMarcus October 11, 2004 at 4:07 pm

What’s wrong with rent?

“Bhagwati anxiously forestalls readers inclined to see this as a case of rent seeking: what we have here, he assures us, is directly unproductive profit seeking, a concept of his own devising that is entirely different.”

Bhagwati may be trying to present too nice a distinction, or perhaps he’s just obfuscating for self-promotion, as Gordon implies, but I will say that I prefer his terminology to the current econ jargon.

(I realize it’s unpopular to suggest that established terms be rejected for something more precise and more communicative.)

Rent-seeking, to a layman, sounds like a landlord looking for a tenant. Murray Rothbard himself decried the specialized use of “rent” in economics to indicate something illegitimate.

If, as Austrians, we understand economic profit to be the reward for entrepreneurial insight and efficiency and the signal that consumers are being satisfied, then “unproductive profit seeking” or perhaps “artificial profit seeking” seems to describe what’s going on in a way people can understand.

Or, to tie it in with Franz Oppenheimer‘s distinction, how about economic profits versus political profits?

anonymous October 12, 2004 at 12:33 am

“Jagdish Bhagwati is by no means a committed supporter of the free market. For him, restrictions on the right of labor unions to strike are little better than slavery.”

Um… excuse me? Is this a non-sequitir or just really, really ugly?

Steven Kane October 12, 2004 at 2:10 am

Anonymous: I’m glad I am not the only one who is confused by those statements.

David Gordon October 12, 2004 at 1:20 pm

Bhagwati thinks that allowing employers to hire replacement workers during a strike is a “draconian” restriction on the right to strike. This view, I take it, is inconsistent with a free market position. I had this view in mind in the passage to which Anonymous and Steven Kane draw attention, and I regret any confusion caused by my overly compressed comment.

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