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The Powerful Lens of Economics

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Here’s a letter to a correspondent who is furious that I dare to criticize Donald Trump’s trade policies:

Mr. Mike Garrison

Mr. Garrison:

My support for free trade prompts you to accuse me of “living in [my] own world unconnected to real people’s concerns.”  With respect, I believe that you misunderstand the case for free trade.

By necessity, each and every one of us inhabits only his or her own small world, you no less than me.  The slice of reality that any one of us – from President to pauper – can survey with our own senses is a vanishingly tiny part of an immense, complex, multifaceted, and dynamic world.  And the slice of this world that any one of us directly experiences is also unique; it differs from the slice that any one else directly experiences.  So if all that I did were to assume that reality in total is nothing more than a scaled-up version of the unique slice of reality that I personally experience, then your accusation that I am out of touch would have merit.

But the great achievement of sound economics is to supply a lens that widens and lengthens – and sharpens – the vision of those who know how to use it [2].  Although a surprisingly powerful tool, this lens is not very complicated; no one needs a PhD in economics in order to use it properly.  But what this lens reveals to those who know how to use it is a vitally important, and immense, part of reality that others nearly always miss.

It’s easy without the lens of economics to see the jobs that remain in the U.S. because of the likes of Trump’s Carrier deal.  But with this lens you see also the jobs in the U.S. that are destroyed because of this deal or that would be, but will now never be, created.  It’s easy without the lens of economics to see the incomes retained by American workers whose jobs are protected by trade restrictions.  But with this lens you see also the incomes lost to American workers because of trade restrictions, as well as the reduction in the spending power of countless ordinary Americans.

Only by wearing the lens of economics can we see clearly the increase over time in living standards for nearly everyone that is possible only with free trade and with what my colleague Adam Thierer calls “permissionless innovation [3].”

In short, the lens of economics enables us to see that which otherwise remains unseen.  Yet that which remains unseen is real, sizeable, and important.  By making visible the suffering caused by protectionism, and the improvements unleashed by economic freedom, the lens of economics inspires those who use it to be a voice for the voiceless, the forgotten, the ignored, and the invisible.

My support for free trade, therefore, has nothing whatsoever to do with my own admittedly thin slice of reality.  Instead, it has everything to do with ensuring that the many realities that are unseen – that are unseen by you, by Mr. Trump, and by everyone else who supposes that freezing economic activity in place today generates only benefits and no costs for ordinary people – be made visible, and that those unseen people be given a voice along with yours in the public arena.

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

…..

The lens of economics also brings into clear vision the reality and humanity of foreigners and the effects that they experience as a result of protectionism.  But my correspondent here cares only about his fellow Americans.  Sad but true.

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