Vilfredo Pareto (1971 [1909], 379) pointed out long ago, “A protectionist measure provides large benefits to a small number of people, and causes a very great number of consumers a slight loss.” This makes it relatively easy to impose import duties, as does the legislative practice of logrolling, or vote trading.23 Furthermore, once in place, import restrictions are difficult to remove. A reduction in a tariff will bring certain harm to particular groups and uncertain gains for others. As a result, those facing large capital losses will fight against such a policy change much more vigorously
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Loss aversion works at society level in the same way ift works at an individual level
