Thanks to free trade within these fifty states, the companies that fail to best serve the needs of their customers don’t last very long. That trade is wholly free within the U.S. is precisely what attracts a great deal of job-creating domestic and foreign investment, simply because lousy business concepts are allowed to fail so that good businesses can quickly replace them. In short, it’s the constant destruction of jobs in the U.S. that enables the fast creation of much better ones.
Applied to the foreign competition that Trump decries, the happy fact that the U.S. is largely open to foreign production is similarly what makes the U.S. such an attractive destination for investment. Figure foreign competition, just like domestic, forces the very economic evolution that appeals so much to investors. Absent foreign trade, the U.S. economy would be quite a bit more depressed as a result of many more proverbial Blockbusters existing at the expense of more capable replacements like Netflix.
So often we hear about Americans “battered” by “foreign trade,” but the certain truth about imports – whether from across the street or from around the world – is that they’re the surest sign of a growing economy. As logic dictates, the fact that so many businesses – domestic and foreign – compete to serve U.S. consumers is the best indicator that open trade has been brilliant for the American people. If it weren’t, we Americans wouldn’t have the world’s talented so aggressively working to serve our needs.
“Fair trade” is code for “unfree trade.”
Of course, no one endorses trade that is genuinely unfair. The crucial questions, however, are just what is unfair trade and what is the best way to deal with it. Protectionists in America want you to think that any imports whose producers receive any assistance at all from foreign governments are unfair. They want you also to uncritically accept their assumption that the best way to deal with unfair trade is for Uncle Sam to raise tariffs — that is, taxes — on American consumers.
Never mind the hypocrisy at work when Uncle Sam — itself a major subsidizer of many U.S. exporters, such as Boeing and Dow Chemical — uses charges of “unfair trade” as an excuse to punitively tax Americans who purchase imports.
Trade is more about efficiency—and hence wages—than about the number of jobs. You probably don’t sew your own clothes or grow your own food. Instead, you buy these things from others, using the wages you earn doing something you do better. Imagine how much lower your standard of living would be if you had to sew your own clothes, grow your own food . . . and a thousand other things.
The case for international trade is no different. It’s not mainly about creating or destroying jobs. It’s about using labor more efficiently, which is one key to higher wages.
Mark Perry offers us a fascinating trade visual.
My colleague Pete Boettke introduces us to Tyler Cowen’s recent conversation with Camille Paglia.
I agree with Bob Higgs (as I almost always do). And I agree with my colleague Bryan Caplan (as I almost always do).
John Stossel writes about his lung cancer and about free markets. (Needless to say – but I’ll say it anyway – Russ and I wish John a full, speedy, and lasting recovery from his illness. He’s a unique talent, one that all friends of liberty should treasure.)
