In a Funk Over Trade

by Don Boudreaux on August 16, 2010

in Seen and Unseen, Trade

Here’s a letter to the Baltimore Sun:

Arguing that trade with foreigners helps foreigners and harms Americans, Alfred Funk asks “Today I am wearing my Indonesian shirt and my pants from China.  Do we really need an economist to tell us what’s happening in our country?” (Letters, August 16).  I humbly submit that the answer is yes.  Contrary to Mr. Funk’s allegation, when we Americans trade with foreigners we help not only the foreigners with whom we trade, we help also ourselves.

For evidence, look at Mr. Funk himself.  Did he – an American – not benefit by buying the clothes he’s wearing?  Did he purchase his shirt and pants to help people in Indonesia and in China, or did he purchase these items to help himself?  Would he prefer that he, and all other Americans, be obliged to pay higher prices for clothing (and for shoes, automobiles, cell phones, electric lamps, softwood lumber, alcoholic beverages,….)?

Second, look at what foreigners do with the dollars that Mr. Funk voluntarily gave to them in return for his clothing: foreigners either spend those dollars buying goods and services that Americans voluntarily produce and sell, or foreigners invest those dollars in America – in either case expanding the American market.

Trade is mutually beneficial.  Mr. Funk’s own actions, if not his words, help to prove it.

Sincerely,
Donald J. Boudreaux

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