Thursday, 20 June 2013

Quote of the Day: How to build a car

Today’s quote is paraphrased from page 70 of David Friedman’s 1996 book, Hidden Order:

There are two ways we can produce cars.  We can build them in Auckland or Petone or we can grow them in the Waikato.  
    Everyone knows how we build automobiles.  To grow automobiles, we first grow the raw material from which they are made – grass.  We put the grass through cows and then out onto ships and send the ships up into the Pacific.  They come back with Hyundais and Hondas on them.
From our standpoint, growing Hondas is just as much a form of production – using New Zealand dairy farmers instead of New Zealand autoworkers – as building them.  What happens up there in Asia is irrelevant; the effect would be just the same for us if there really were a gigantic machine sitting somewhere between New Zealand and the Sea of Japan turning milk, butter and cheese into cars.  
    Tariffs would indeed be a way of protecting New Zealand workers – from other New Zealand workers.

You can find the original where I found it, over at Cafe Hayek.

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