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Is Free Trade Unethical?

Here’s a letter to a high-school senior:

Mr. Kimbrough:

Your teacher is mistaken to assert that, because “free trade causes innocent people to lose jobs,” the case for free trade “is sound economics, but ethically is questionable.”  In making this assertion, your teacher overlooks several key features of trade generally and of a policy of free trade specifically.  Here’s are just two:

First, in the U.S., the number of layoffs and discharges each month that results from imports is a tiny fraction of the total number of layoffs and discharges.  Consider this telling comparison.  Earlier this year the trade skeptics at the Center for Economic and Policy Research estimated that the number of American jobs destroyed each year by imports from 2001 through 2007 was, on average, 620,000 – or 3.72 million over the full six-year period.  Let’s not question the CEPR’s figure – a figure that that organization has every interest in making as large as possible – and compare it to total layoffs and discharges in the U.S.  The month of September 2017 alone saw 1.7 million layoffs and discharges.  This monthly figure is typical.  Therefore, in each two-month period today in the U.S. the total number of jobs destroyed is about the same as the number of jobs destroyed by imports over the entire six-year period 2001-2007.

These facts imply that the vast majority of job destruction is caused by improvements in technology, shifts in consumers’ tastes, and other economic changes that have little or nothing to do with imports.  And so if your teacher really believes that an economic process is ethically questionable if it causes job losses, he or she should oppose not just international trade but all economic competition and change.

Second, ask your teacher what is so ethical about a relatively small handful of existing domestic producers persuading the state to punitively tax fellow citizens whose only offense is to spend their own money in ways that they judge are best for them and their families.  If student interest in majoring in economics were to decline, would your teacher think me to be ethically justified if I – a professor of economics – persuaded the state to punitively tax all students who choose to major in subjects other than economics?  My guess is that he would not.  If my guess is correct, then to be consistent your teacher should also see that it is quite unethical for the state more generally to artificially obstruct consumers’ attempts to spend their money as they – rather than as politically powerful suppliers – see fit.

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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