Repeating a Key Point about the Non-uniqueness of International Trade

by Don Boudreaux on November 18, 2017

in Competition, Myths and Fallacies, Seen and Unseen, Trade

Here’s a letter to a college student who “can’t understand [my] zealotry” for free trade:

Mr. Evan Dunlap

Mr. Dunlap:

You ask why I insist that there are no losers from international trade.  Your question is fair, for such an insistence does, I confess, emit the odor of what you call “zealotry.”  But I stand by my insistence.  Let me repeat here one of the key justifications for my stand; it’s a justification that takes seriously the impact that language has on our understanding of reality.

To say – as many say – that “international trade has losers” conveys the impression that what are called the “losses” from international trade are unique to such trade.  Yet this impression of the uniqueness of international-trade’s downsides is false in at least two related ways.

First, restricting trade destroys – and prevents the creation of – as many jobs as trade itself destroys and prevents from being created.  Second and more fundamentally, in free markets it is not really international trade that destroys particular jobs; it is economic competition.  In any economy in which sellers are free to compete for consumers’ patronage – and consumers are free to respond to such competition – some particular jobs will be destroyed while others are created.  Jobs will constantly churn.

Competition from sellers located in foreign jurisdictions is only one of innumerable specific manifestations of competition that destroys (and creates) jobs in the domestic economy.  Therefore, to say that ‘trade with foreigners – competition from foreigners – destroys jobs’ is no more or less true than to say that ‘trade with Arizonans destroys jobs’ or that ‘trade with blue-eyed people destroys jobs’ or that ‘trade with women destroys jobs.’  You can say such a thing, and it will have in it a kernel of truth – but the impression conveyed will be wholly false.  It is simply untrue both that such trade is unique at destroying particular jobs, and that the destruction of particular jobs will necessarily be reduced by government obstacles to such trade.

Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA  22030


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