My Mercatus Center colleagues (especially Dan Griswold and Malia Dalesandry) and I are pleased to announce the publication of Pierre Lemieux’s excellent new Primer on Free Trade: Answering Common Objections. This publication is a product of Mercatus’s Program on the American Economy and Globalization.
In this compact and clear document, Pierre does a superb job answering the most common objections to free trade. A slice:
The mercantilists of the 16th to 18th centuries thought that a country should export as much as possible and import as little as possible. This is an economic error. Just as today individuals sell (including labor services) in order to buy something, countries export in order to import. As James Mill wrote nearly 200 years ago, “The benefit which is derived from exchanging one commodity for another, arises, in all cases, from the commodity received, not from the commod- ity given.” In other words, exports are a cost because the United States uses its resources to produce goods and services for foreign countries; imports are a benefit because the United States uses the resources of foreign countries to obtain its own goods and services. So, contrary to what the mercantilists thought, the United States should import as much as it can and export as little as possible (assuming it were possible to maintain this regime for long). A reductio ad absurdum of this mercantilist argument is easy. Imagine that the United States ships its exports by sea and that the returning ships bring back imported goods. If the returning ships sank, would this situation of exports without imports be a bene t for the United States? Obviously not.
Do read the entire Primer. I will recommend it widely and frequently.