Andy Morriss on Protectionist Platitudes

by Don Boudreaux on August 24, 2006

in Trade

My friend Andy Morriss, a law professor at the University of Illinois, sent this spot-on letter today to the Financial Times:

Sirs,

Guy de Jonquieres is right on the money when he advocates unilateral trade liberalization as the best alternative to the Doha round shenigans (“Do-it yourself is free trade’s best ‘plan B’,” Aug. 24). But he falls into the usual trap of blaming countries’ failure to liberalize on shibboleths such as “fierce hemispheric rivalry between the US and Brazil.  Nonsense! There is one, and only one, reason countries fail to engage in free trade – and that reason is that barriers to trade make a few people rich even as they make many people poor. Interest groups lining their pockets at the expense of their countrymen, whether in France, the United States, or China,a re responsible for the failure of the Doha round, the Free Trade of the Americas and a host of other such agreements.  From sugar to cheese to computer chips, the opponents of free trade mouth platitudes about infant industries, national security, and traditional lifestyles.  In the end, however, their arguments all reduce to “I’ve got mine and you can’t have any.”

Well said, Andy!

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  • The comments are spot on that those who oppose trade do so for personal reasons. For example, steel workers lobbied Bush to implement tarrifs they believe would protect them. That's despite such tarrifs hurt all other industries in the US that are using steel. The sad thing is, it likely causes even more job losses for them than the lack of extra protections because off the damage it causes to all the other industries consuming steel.

  • Does Professor Morriss no longer teach at Case Western Reserve? I'm disappointed to hear my alum lost him.

  • Che Stadium

    How does "K Street" benefit more from free trade than from protection. I would think that they derive most of their income from focused industry groups. Industries seeking increased trade protection would seem to be a cash cow.

  • tw

    Actually, save the rustbelt is indeed correct when he writes: "MORE trade has shifted wealth toward Wall Street."


    Increased trade has led to lower prices on a whole range of goods for consumers, thereby leaving more money in their pockets when they purchase the same basket of goods as they did a few years ago.


    Sure, some of that leftover money is spent, but some is saved....in the form of investment in stocks and bonds that are traded on Wall Street. In fact, we have a record number of people owning stocks in bonds in our country, whether in individual companies or via mutual funds.


    From his other posts, I know he didn't mean to make this point, but I'm glad he did.

  • Since when do "countries" engage in free trade?

  • Al

    Rustbelt,


    If there is a global corporation suppressing the poor and becoming fabulously rich I want to know about it so I can buy their stock.


    Also, higher taxes and regulation shift money to K street.

  • JohnDewey

    rustbelt,


    First, why do you refer to the 300 million Americans who now pay lower prices as "the unfortunate 80%"? Like nearly every American consumer, I'm happy to pay less for golf shirts and televisions? How are we the "unfortunate 80%"?


    Second, who is your boogeyman that you keep referring to as "Wall Street"? If multinational firms are realizing higher profits through globalization, just who is benefitting? The major stockholders are:


    - pension funds that current and retired workers depend on as seniors;


    - mutual funds in which American workers invest their 401K and IRA savings;


    - insurance companies that all Americans need to count on in times of tragedy.


    Why do you keep insisting that American workers are getting the shaft? I'm a representative American worker who has a much better standard of living than did my father's generation of workers. Some of that is due to my better education, but much more is because I pay less for golf shirts and receive better returns on my investments.

  • Kent Gatewood

    If we accept the idea that unilateral free trade is good and subsidies are bad, we must be sure that foreign aid will not be used to subsidize competition from abroad.

  • save_the_rustbelt

    "...and that reason is that barriers to trade make a few people rich even as they make many people poor...."


    Actually, it looks that the US experience the past several years is just the opposite. MORE trade has shifted wealth toward Wall Street and K Street.


    But hey, we of the unfortunate 80% do get to shop at Wal-Mart for "cheap sneakers."

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