Last week I wrote about the basic economic illiteracy behind of Oren Cass’s case for industrial policy. So basic were the mistakes that I thought perhaps I had misread Cass’s argument. Like the villainous Mugatu from edy Zoolander I asked myself, “Doesn’t anybody notice this? I feel like I’m taking crazy pills!”

Thankfully the economist Donald Boudreaux, former economics-department chair at George Mason, writing today for AIER has reassured me that Oren parative advantage is not his discussion parative advantage:

The minor mistakes include Cass’s claim that most economists, when they theorize about trade, disregard, or at least discount, the fact parative advantageis (to use his term) “endogenous.” In fact, however, petent economists know full well that the pattern parative advantage changes frequently and is largely the product of legal, political, social, and economic institutions as well as of individuals’ conscious choices regarding their occupations. While economists typically hold the pattern parative advantage “fixed” in order to clearly demonstrateits elementary logic, petent economist believes parative advantage is fixed in the real world, needing only to be “discovered.” Nor does petent economist insist parative advantageis exogenously imposed by nature and impervious to human attempts to alter it.

Boudreaux also points out Cass’s ignorance of the fact that low wages reflect low productivity:

Manufacturers operate in low-wage countries not because they can exploit workers there, but because those workers – having worse alternatives than those available to workers in the U.S. and other high-wage countries – have parative advantage at performing low-value-added manufacturing tasks. It’s mysterious why Cass, along withother‘economic nationalists,’ wish such manufacturing tasks to be performed by Americans, who parative advantages at performing much higher value-added tasks and, as a result, are paid much-higher wages. Because Cass mistakenly believes that low wages in “cheap labor” countries reflect, not low productivity, but exploitation, he’s blind to the fact that, were such jobs ‘returned’ to America, almost all Americans who perform those jobs would take substantial pay cuts.

These errors are pared with what Boudreaux argues is Cass’s fundamental error:

Boudreaux’s short piece is well worth reading in its entirety. It illustrates how economic ignorance continues to be a stumbling block to understanding how economic nationalism hurts nations.