Washington's propensity to say one thing and then do something quite different wins few friends. But U.S. determination to protect its domestic steel industry with high antidumping tariffs may not be quite as wicked as most assume. The move flies in the face of claimed U.S. devotion to free-trade principles. But those principles were never quite as fine as they are made out to be.

Free-trade theory says that if a nation tries to protect an industry in which it is noncompetitive, it not only harms nations that can produce the same good more efficiently. It will also harm itself and -- not just because goods produced by the industry will be that much more expensive. By using up resources needed by other and more efficient industries, costs rise throughout the economy. (Free-trade theory owes much to the quaint 19th-century assumptions about decreasing rather than increasing returns to scale.)

But in that case how come Japan made such good progress back in the days when it sought ruthlessly to protect a whole range of noncompetitive domestic industries? Japan showed us how rapidly costs in an industry can fall as production increases behind tariff barriers (increasing rather than decreasing returns to scale). It also showed how the entire industrial base of an economy improves as various industries develop in unison (more increasing returns to scale).