Serious and Pseudo-Serious Arguments About Trade

"Free trade dogma" is, as I understood it, the idea that the world will fall apart without completely unfettered trade; that any tariff, no matter how small, will be the end of all of us;

Hyperbole much?

and that any defense of anything that inhibits unequivocal free trade is per se nonsense that isn't subject to debate.

There's at least some ring of truth to this portion. I'll jealously defend liberty but that doesn't mean that it's not open for debate. It just means that the debate opponent doesn't much value his or her own liberty (or the liberty of others) to voluntarily exchange items with others in the marketplace. I personally think that that's nonsense but I do understand and realize that there are others (and it seems like that you're one of them), who would advocate using the power of the state to make it more difficult for me and others to freely exchange items.

"Free trade dogma" is, as I understood it, the idea that the world will fall apart without completely unfettered trade; that any tariff, no matter how small, will be the end of all of us; and that any defense of anything that inhibits unequivocal free trade is per se nonsense that isn't subject to debate.

Will no one own this sentence?

"We've mentioned before the curious fact that economists go into convulsions at even the slightest skepticism towards free trade dogma."

What is "free trade dogma"? I have to assume that it refers to comparative advantage and gains from trade. To what else could it refer? Over what other notions of trade would economists (not SOME economists mind you, but economists in general) go into anything like "convulsions"?

Don't bother to claim that "free trade dogma" refers to the notion that international trade is currently unfettered. I've not seen one economist so much as raise an eyebrow at the suggestion that much progress has yet to be made before international trade can be said to be free. Convulsions? Not even close.

No. Wiggle all you want, but there is no reasonable interpretation for this lead sentence other than that the author finds it odd that economists as a group would defend free trade.

Really, this isn't difficult. If you find it painful to be accused of writing nonsense, don't write nonsense. It's no guarantee, of course, but it is a good place to start.

International free trade does not and will not exist as long as an unelected, unaccountable bureaucracy such as the WTO oversees international trade.

Absent from this discussion is any mention of the differential tax treatment of the US Corporate Net Income Tax and the VAT.

Before we can seriously discuss "free trade" we must insist on leveling the tax playing field.

Please see this Op Ed from recognized expert, Gary Clyde Hufbauer: http://www.iie.com/publications/opeds/oped.cfm?...>

And my written testimony to the House Ways and Means Committee: http://waysandmeans.house.gov/hearings.asp?form...>

And this hearing transcript: http://bulk.resource.org/gpo.gov/hearings/108h/...>

While this differential tax treatment exists, free trade is a noble myth.

Man, I love being right. And it happens so darn often, too.

Thanks for discussing my article.

First, let's make a distinction: That extended quote that Mr. Boudreaux seemed to find objectionable was from my column, not Weisenthal's post. Let's leave Weisenthal out of it.

My column only praised free trade, and, as some commenters above have pointed out, explicitly made it clear I was speaking about politicians. Perhaps "official voices" was the wrong way to put it, but I was talking about the recent President, the Congressional committee chairmen, and the new Commerce Secretary.

The point of my article was to point out how free-market arguments get used as a cover for corporate welfare. Most of my articles focus on the Baptist-and-Bootlegger phenomenon like this: how altruistic, principled arguments are used to justify special government favors. Most of the time it is a "consumer protection regulation" that really helps the largest manufacturers crush smaller competitors, but this time it's "free trade" as a cover for subsidized trade.

This post, I hate to say it, seems to be one of those "convulsions" Weisenthal wrote about.

"We've mentioned before the curious fact that economists go into convulsions at even the slightest skepticism towards free trade dogma."

First sentence. This snarky comment doesn't call into question the value of free trade? "Curious fact"? "Convulsions"? "Sightest skepticism"? "Dogma"?

Really?

I only taste Carney's disdain for the words "free trade" in the mouths of politicians, including corporate officers and lobbyists. He isn't addressing any idealistic policy at all. He's addressing international trade as it really is, and it really isn't ideally Free.

To a politician, "freedom" describes his ability to tell you what to do without interference from anyone else, including you.

I would dispute H. Harrison above on one point. I read the article and I taste the disdain and denigration of free trade in Mr. Carney's words.

It is the most un-free market we have, and virtually no one ever points out that labor is a commodity that is traded.

Labor is not technically a commodity, but ironically, in the U.S., international trade in the least skilled labor, which is closest to a commodity, is freest for two reasons. First, as a practical matter, we just can't stop the flow across our southern border. Second, many powers that be don't really want to stop it. I don't want to stop it either, but effectively tolerating massive trade in unskilled labor while strictly limiting trade in skilled labor is an insane policy.

I supported Ron Paul and could enthusiastically support him again, but I've never liked his support for a border fence or opposition to birthright citizenship and amnesty for illegal immigrants. His utopian vision of a gold standard puts me off too. A decentralized monetary authority is defensible, but I wish libertarian champions of decentralized authority would entertain models other than fixing the price of a single commodity. I like his opposition to the corporative warfare state and empire much better.

Funny, my opening comment to my post was about people who go into convulsions at any questioning of free trade orthodoxy.

And then Don -- without having taken the time to figure out who wrote what -- blasts it, calls it "the most disingenuous that I've ever read." and "a spoof" and uses phrases like "this side of toddlerhood."

So I guess that proves my point, eh?

That's ok, Cafe Hayek is still one of my favorite econ blogs. I read it every day without fail.

Also, Russ, big "Invisible Heart" fan!

But today we know better. Lincoln was inadvertently doing the Confederacy a favour. By preventing foreign competition, Southern industries were strengthened, and jobs with both saved and created. ~ Lee Kelly

Clever and razor-sharp comment!

It is an interesting thing the author points out - that more people raise hell over tariffs than they do over export subsidies. I wonder why that is?

They're both bad for the taxpayer-citizen in the domestic country. The difference is, is in the way they play out. The tariff is a barrier to trade whereas the export subisdy is a manipulation of the true marketplace realities, ultimately lowering the cost of goods availible for importation by foreigners. The net effects are a lot like the effects foreign aid...and you wont find too many Left-leaning vocal protests or media types get all that mad about spending taxpayer money to help a domestic business service the wants and needs of foreigners [that's as long as the work is done here by union labor, of course].

I would add that by and large, businessmen are notoriously bad capitalists. They don't believe in free markets, they believe in markets rigged to favor themselves against their competition. Nothing new about that at all.

I didn't read the entire article, but clearly, if we are discussing politicians, they have been quite hypocritical about free trade for a very long time, especially Republicans. They use the rhetoric of free trade to impress the libertarian wing, but when they find themselves in power, they do what all crooks do, they cheat and steal(that is, impose tariffs and subsidies). This has served to harm the cause of free markets more than out and out opposition to them.

Martin, right on with your comment concerning trade in labor. It is the most un-free market we have, and virtually no one ever points out that labor is a commodity that is traded. They discuss the limiting of labor imports as "protecting the borders".

I 3rd Harrison's analysis, and I don't find much to dispute in Carney's article either. It's like Don wants to preach his idealistic free trade message without seeming to 2nd Carney and Weisenthal's critique of corporatist-political hypocrisy. In reality, the politicians (including corporatist CEOs) with "free trade" on their lips are shameless whores as much as other politicians.

So, the world of free trade doesn't exist and that is proof that free trade is to be avoided?

The article never says that free trade should be avoided. It asserts a double standard towards tariffs vs. subsidies, and it asserts that "free trade" generally, in political rhetoric, is disingenuous, because international trade is anything but free. I hardly found an objectionable word in the article.

My principal grievance with the article involves the double, triple and quadruple standards it omits, particularly involving the most egregious interference in free, international trade, trade in the most valuable resource, labor. This massive protectionism is so cloaked in political newspeak that we don't even discuss it under the rubric of "trade". It's called "immigration" instead.

Where did Carney say politicians were offering the "best" arguments for free trade? Or that he was "shocked!" at the hypocrisy of the politicians? Carney writes that Gary Locke supports subsidies and corporate welfare, and, despite those actions, has long espoused "free trade." Is that not correct? If not, show us why. If it is, then where's the controversy? Carney's post seems straightforward: many of the people using free trade rhetoric don't support genuine free trade. You seem to agree with that. What's the problem?

"Truest and best" does not equal "leading official." That's the source of your error. Carney isn't attacking free trade, and nowhere does he indicate that the people he cites in the post are the intellectual standard-bearers of the free trade movement. To me, that's an obvious point that yields one of two conclusions: 1) you just swung hard and missed wildly on this one, or 2) this post is itself disingenuous. As a longtime reader of the Cafe and your writing in the Freeman, I don't believe the latter. So I'll just chalk this one up to the fact that no one is perfect, and assume you'll come around on this eventually.

Here, Here, Lee the same way that the Israelis are helping out Gaza by blockading it. The funny thing is that with the next G-20 Summit we will see both “stop free trade” and “lift the blockade of Gaza” signs carried by the same people in the same streets. I sincerely hope that those I interact with never do me the favour of blockading me.

I'll 2nd Henry Harrison's analysis.

Here's a little thought experiment:

How many Americans have heard a politician talk about "free trade" and how many americans have heard "Leland Yeager, Jagdish Bhagwati, Doug Irwin, Johan Norberg, Martin Wolf, Dan Griswold, and the Cafe's own Russ Roberts" or any other economist talk about free trade?

A hell of a lot more have heard politicians talk about it. Therefore they are the "leading official voices" by one reasonable definition. They may not know what they're talking about, but they are who people hear talking about trade.

I know this upsetting to academic economists who would like to be "leading official voices", but are not.

Lot's of people have heard of President Obama and have heard him mention trade. Almost nobody has heard Don Boudreaux or Russ Roberts talk about trade.

If they want to change that, they should run for office and play that game to win.

But the leading official voices for free trade today are the same people who have authored and championed bailouts for our banks and manufacturers and frenetic spending to prop up our companies.

Hear that Don? You're officially unofficial!

Also, today’s free trade evangelists regularly trample on the notion of free trade by backing subsidies for manufacturers and exporters.

Soooo, free trade "evangelists" are evangelizing for more government interference rather than less? On that note, I'm going to go pull for the Braves by rooting for the Yankees. Excuse me.

Henry,

It seems to me that Weisenthal states his position in his first two paragraphs:

"We've mentioned before the curious fact that economists go into convulsions at even the slightest skepticism towards free trade dogma.

Even the slightest whiff of protectionism is seen as a massive threat to the global economy. But as Tim Carney* reminds us, the whole thing is silly because the world of untrammeled free trade, where countries do little to protect their native industries is a myth."

These two paragraphs are about as logically compelling as gibberish. So if he is not disingenuous, would be it be fair to say he is an idiot? Or kidding?

Your complaint doesn't seem to be with Weisenthal's post, which really only makes the obvious point that a purely free trade world doesn't exist. Rather, your complaint seems to be with Tim Carney's original post.

Weisenthal approvingly quotes Carney's post, sure, but it's a bit harsh to link to Weisenthal and call him "disingenuous" (much less "one of the most disingenuous ..." when the real claim you're disputing is in a different place altogether, and written by a different author altogether.

Beyond that, what's disingenuous about Carney's post? Look at the first paragraph of the quoted excerpt:

"If you dig a bit further into the legislative and lobbying priorities of those politicians and businesses now fighting off 'protectionism,' you see that by “free trade” many powerful folks in Washington really mean whatever policies help well-connected multinational businesses."

So who is Carney writing about? Economists, professors, think tank dwellers? No, and it's right there: he's writing about "politicians and businesses" ... "powerful folks in Washington" ... "well-connected multinational businesses."

His argument might be wrong, but I find it odd to accuse an author of being disingenuous when he explicitly makes clear, right off the bat, which people he's writing about, and then ... writes about those people.

It sounds as if your entire complaint here is that Carney cites corporate officials and Washington politicians as "leading official voices for free trade." You may not think those people fit that label, and you're probably right. But it isn't "disingenuous" to believe they do, and Carney provides good evidence to back up his claim (or at least the claim that they are advocating free trade now, but haven't been). To me, Carney's post is pretty straightforward and accurate.

I don't make it a point to disagree with the Cafe Hayek authors often, but this time I think you're way off the mark. Ironically, this hysterical response to Carney's post kind of proves Weisenthal's point.

It is an interesting thing the author points out - that more people raise hell over tariffs than they do over export subsidies. I wonder why that is?

Well - it makes sense why there is less criticism of export subsidies domestically - but even the WTO seems to give more leeway on the export side of things than on the import side. Perhaps that's because it's easier to mask an export subsidy as some other domestic policy priority, and the WTO wants to be careful about violating sovereignty.

During the U.S. Civil War, Lincoln's Anaconda Plan involved encircling the Confederacy by land and sea. The South would be significantly weakened, it was thought, if its trade with the rest of the world could be cut off.

But today we know better. Lincoln was inadvertently doing the Confederacy a favour. By preventing foreign competition, Southern industries were strengthened, and jobs with both saved and created.

After a careful reading of the post I have to say he makes some compelling arguments. I'm so convinced I going to become a shut-in, barracade my front door, purchase nothing and stop going to work.

Stopping Free Trade Begins At Home!

Brilliantly written critique, as usual.

Congratulations, again.

Well Don,

I read the entire article and frankly if he had posted it here he would be called a troll for writing something so patently wrong.

"Joe Weisenthal|Mar. 27, 2009, 12:33 PM|15

PrintTags: Economy, China, Politics, Bailout


We've mentioned before the curious fact that economists go into convulsions at even the slightest skepticism towards free trade dogma. Even the slightest whiff of protectionism is seen as a massive threat to the global economy. But as Tim Carney* reminds us, the whole thing is silly because the world of untrammeled free trade, where countries do little to protect their native industries is a myth. That world doesn't exist:"

So, the world of free trade doesn't exist and that is proof that free trade is to be avoided? Sound positively muirduckian to me.

We really could literally pick his post apart word by word and show how, Ahem, disingenious he is, but you already did that and I got a sock drawer to organize.

my bad.

After some research, that piece on Ron Paul was by James Kirchick.

Sorry.

Isn't Joe Weisenthal the one who authored that disingenuous and sensationalized hit piece about Ron Paul during the 2008 campaign in the New Republic?

Anyone remember that? That name rings a bell. I think that's it.