This Truth, Constantly Overlooked, Must Be Constantly Repeated

by Don Boudreaux on April 28, 2017

in Myths and Fallacies, Seen and Unseen, Trade

Here’s an open letter to a commenter at Arnold Kling’s excellent askblog:

Mr. Rohan Verghese

Mr. Verghese:

Commenting on a post at Arnold Kling’s askblog, you write that “Trump’s great breakthrough has been to convince Conservatives that the costs of many of the policies held since the 1990s have been higher and sharper than they realized, and dis-proportionally levied on specific communities.  Libertarians, as Boudreaux is constantly pointing out, simply feel that since the net benefits to humanity are still positive, everything is fine.”

With respect, you misunderstand the argument for free trade.

First, while it’s true that free trade yields net benefits to humanity, it yields net benefits also to the citizens of each country.  It’s a common error, which you seem to commit, to misconstrue the core argument for free trade as saying that free trade is justified because the gains to foreigners outweigh the losses to fellow citizens.  Again, under free trade fellow citizens gain.  (And, by the way, protectionists nearly always deny, rather than concede, that under free trade fellow citizens gain on net.)

Second, while it’s also true that domestic producers must adjust to changing patterns of consumer demand that occur with free trade, economists who argue for free trade point out a reality that most people, including you, miss – namely, because patterns of consumer demand change also without free trade, there’s no reason whatsoever to single out the adjustments required by free trade as excuses for government to prevent consumers from changing the ways that they spend their money.  Indeed, much of the economic change in the decade that you mention – the 1990s – was sparked by rapid advances in I.T. that originated right here in the USA.

Unless you’re willing to empower the state to superintend all consumption decisions, and to obstruct those decisions that politicians or bureaucrats judge to be too disruptive, you, Trump, and other protectionists are simply inconsistent to single out trade with foreigners as an alleged problem.

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

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