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Perspective Is Important

Here’s a letter to a long-time skeptical Cafe Hayek patron:

Mr. Ken Quinn

Dear Mr. Quinn:

Thanks for your e-mail.  I did indeed read the letters in today’s Wall Street Journal defending Donald Trump’s plea for protectionism against my case for free trade.  You’ll be unsurprised to learn that I’m less impressed than you are with Ramon Nitzberg’s assertion that lower-priced imports (to quote Mr. Nitzberg) make only “some Americans are better off.  Some of the Americans, those who used to supply these goods and services, are not better off.  They are unemployed Americans.”

Mr. Nitzberg’s assertion is the product of a perspective that’s far too squinty. From a wider and more mature perspective, evidence and economic reasoning contradict this assertion with a vengeance.

The root flaw in Mr. Nitzberg’s assertion is its implication that the number of jobs is fixed and, therefore, that whenever an American loses a job to a change in consumer demand or to a newly exploited means of supplying that good or service using fewer domestic workers, the number of jobs in America declines permanently.  History, however, falsifies this implication. For example, in 1800 three in every four jobs in America were on farms.  In 2015, farm work accounts for only 2 in 100 jobs.  Yet despite this massive destruction of agricultural jobs, today tens of millions more Americans are gainfully employed than were employed in 1800 – and nearly all are employed at jobs that pay much higher wages than were paid in the past.

So while the destruction of most agricultural jobs did indeed leave some workers unemployed, no one (not even, I’ll bet, Mr. Nitzberg) would deny that Americans have been made better off by the ultimate source of this job destruction – namely, consumers’ and producers’ freedom to discover and to exploit lower-cost, labor-saving options.  Only if you and Mr. Nitzberg honestly believe that the economic freedom that yesterday destroyed agricultural jobs in America can be said to have made only some Americans better off do you have any grounds to dispute the claim that the economic freedom that is today destroying manufacturing jobs in America makes Americans better off.

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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