7 March 2011
Mr. Ian Fletcher
Dear Ian:
In your latest essay at The Huffington Post, you allege that supporters of free trade are guilty of “social snobbery” (“The Social Snobbery of Free Trade,” March 7). You offer three, and only three, pieces of evidence for this proposition. The first is a quotation from New York Times columnist Thomas Friedman, and the second is a quotation from Barack Obama – each suggesting that working-class people too quickly blame trade for whatever economic misfortunes they suffer. The third piece of evidence is the fact that, while most members of the mainstream media are center-left on a majority of issues, they are well-paid and “lean right” on trade.
You masterfully massacre a straw man. Contrary to your explicit claim in the case of Friedman, and your implication in the case of Obama, the pronouncements of economically confused journalists and professional politicians aren’t even remotely appropriate examples of the best arguments for free trade.
Here’s a challenge for you. Search for examples of snobbery in the arguments for free trade made by scholars such as Adam Smith, Frederic Bastiat, Jagdish Bhagwati, Henry George, Daniel Griswold, Douglas Irwin, Fritz Machlup, Martin Wolf, and other economists and researchers who are recognized authorities on trade. You’ll come up empty. (Note: pointing out that many people do not understand economics is not an instance of snobbery.)
If nothing else, you have chutzpah to pin the label “snobs” on free traders – who argue that individuals ought simply be left free to spend their money in whatever ways they choose – while you promote a policy of giving third-party strangers in Washington the power to obstruct, for some allegedly higher good, these private, individual consumption choices.
Sincerely,
Donald J. Boudreaux
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I think Fletcher’s point is a good one. I think that so-called protectionist activities are often coupled with xenophobia and job protection. There is a misguided and typically American myopia that our trading partners engage in free trade the same way we do. That’s not true. An examination of the philosophical premise of the original free traders – Keynes, Ricardo et. al. – is the proposition of comparative advantage. The original theory that free trade maximizes global GDP has two exceptions – first is subsidies and second is dumping. So even the original free traders would agree that if our trading partners are creating artificial cost structures by subsidizing or dumping then what THEY are doing isn’t free trade. I think that’s the entire point that is missed in this analysis. And the other piece – that subsidies to exporters only disadvantage the exporting nation and provide income to the nation that imports these goods is also a fallacy – it’s short-term thinking. We have a real world example in the strategic minerals business – rare earths etc. The Chinese dumped into the US and put this industry – too tiny to afford to file legal cases – out of business in the US. Fast forward 20 years later and the Chinese are using their rare earth exports for poltiical purposes. This economic system is called “mercantilism” and Britain’s 17th century mercantilism is what the neo-classicals were fighting against.