Monday, September 12, 2016

Maxim-izing Utility

Lucrum sine damno alterius fieri non potest. -- Publilius Syrus  
Le profit de l'un est dommage de l'autre. -- Michel de Montaigne  
Whatsoever is somewhere gotten is somewhere lost. -- Francis Bacon 
For some two hundred years both economic theorists and practical men did not doubt that there is a peculiar advantage to a country in a favourable balance of trade, and grave danger in an unfavourable balance, particularly if it results in an efflux of the precious metals. But for the past one hundred years there has been a remarkable divergence of opinion. The majority of statesmen and practical men in most countries, and nearly half of them even in great Britain, the home of the opposite view, have remained faithful to the ancient doctrine; whereas almost all economic theorists have held that anxiety concerning such matters is absolutely groundless except on a very short view, since the mechanism of foreign trade is self-adjusting and attempts to interfere with it are not only futile, but greatly impoverish those who practice them because they forfeit the advantages of the international division of labour. […] Nevertheless, as a contribution to statecraft, which is concerned with the economic system as a whole and with securing the optimum employment of the system’s entire resources, the methods of the early pioneers of economic thinking in the sixteenth and seventeenth centuries may have attained to fragments of practical wisdom which the unrealistic abstractions of Ricardo first forgot and then obliterated. -- John Maynard Keynes
Trade will find its own level. -- Dorning Rasbotham
The price of corn, like water, will find its own level. -- Benjamin Franklin
Dexar hazer a la naturaleza allí, y aquí a la moralidad. -- Baltasar Gracian
Patience is a remedy for every sorrow. -- Publilius Syrus


Bruce Webb said...

"The price of corn, like water, will find its own level. -- Benjamin Franklin"

Unless the larger landowners/aristocracy , who through the development of the Parliamentary system over time have monopolized control of government (indeed having wrested most power from the monarchy), decide to pass the Corn Laws.
It is of course important to note that all this was POST Franklin.
(If I was childish and shallow I would say it was a matter of Parliament saying 'Take THIS Ben!'. Oh did I say "If"?)

Sandwichman said...

J. F. Barham, speaking in Parliament in 1808 on the issue of subsidizing the construction of sugar distilleries:

"To this doctrine, no man assents more fully than I do. The theory is most just. But, sir, nothing leads into more error than the false application of true principles; and no maxim has ever been more misapplied than this, that trade will find its own level. So it will, if left to itself: but then it must be left to itself throughout. If you have interfered with various restrictions and regulations already it is most absurd, in one particular instance, to quote a rule you have constantly disregarded."