One of the most intellectually shallow arguments against free trade is the one that motivates this op-ed in today’s New York Times by Robert E. Lighthizer. In short, the argument is that free traders are impractically principled; a better policy (the argument implies) is one that recognizes that trade is sometimes good and sometimes not so good. Here are two letters that I sent to the NYT in response.
Robert Lighthizer
dismisses principled free-traders as dogmatists who impractically stick
to their guns "no matter how many jobs are lost, how high the trade
deficit rises or how low the dollar falls" ("Grand Old Protectionists,"
March 6). Alas, the impractical dogmatists are Mr. Lighthizer and his
fellow trade "pragmatists."
There is no credible evidence -
none, nada – that free trade causes net job losses. Moreover, far from
being undesirable, a higher U.S. trade deficit means increased foreign
investment in the American economy. And a falling dollar generally
reflects worsening U.S. domestic policies, such as inflationary
money-supply growth, the likelihood of higher taxes or more
command-and-control regulations, and, indeed, an increased probability
of U.S. protectionism – protectionism that, by stifling entrepreneurial
dynamism, makes America a less attractive place for foreigners to do
business.
Sincerely,
Donald J. Boudreaux
My second letter:
Among Robert Lighthizer’s
objections to principled free-traders is their opposition to
protectionism "no matter how many jobs are lost" ("Grand Old
Protectionists," March 6).
If Mr. Lighthizer is referring to
overall employment, his facts are wrong. Free trade does not reduce
net employment. But perhaps he’s talking about specific jobs, such as
those lost in Carolina textile mills when Americans buy more textiles
from abroad. The argument seems to be that practical statecraft often
justifies protecting such jobs even if doing so prevents the creation
of other jobs in their place. If this is Mr. Lighthizer’s point, he’s
too modest when calling for trade policies that allow for
"practicality, nuance or flexibility." Because technology destroys far
more jobs than does trade, Mr. Lighthizer should endorse also a
"pragmatic" approach to innovation – empowering government with the
flexibly and nuance to block firms’ introduction of
efficiency-enhancing production techniques that displace workers.
Surely, according to Mr. Lighthizer’s practical logic, we must reject the "dogma" that tolerates "unbridled"
improvements in firms’ operating efficiencies.Sincerely,
Donald J. Boudreaux
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