Here’s a letter to an e-mail correspondent (who sent a similar e-mail, I gather, to my great colleague Walter Williams):
Dear Mr. B__________:
Disturbed at my and my colleagues’ support for free trade, you ask “how much does a cheap Chinese toaster at the big box store really cost after you factor in the unemployment it caused?”
Contrary to your supposition, labor saved by economic activities is a benefit of such activities rather than a cost. Consider the washing machine in your home. It’s a benefit to you precisely because of the labor that it saves you from having to exert to wash your clothes on a washboard. Your washing machine enables you to enjoy clean clothes plus whatever activities you pursue using the time that you would have otherwise spent washing your clothes by hand. That labor-saving device makes you richer. And likewise with trade, which is a technique for saving labor.
So just as you would not describe the labor that your washing machine saves you as a cost of washing machines, you should refrain from describing the labor that trade saves an economy as a cost of trade. It is not a cost of trade; it is a benefit.
Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030
