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Slaying More Trade-with-China Myths

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Here’s a letter to The Weekly Standard:

Editor:

Tony Mecia misses several important realities in his expression of concern that Americans’ trade with the Chinese jeopardizes U.S. national security (“The Real China Threat [2],” Dec. 10).

First, contrary to Mr. Mecia’s claim, “the loss of 7 million manufacturing jobs in the last 40 years” is not a “cost”; it’s a benefit. These jobs were lost overwhelmingly to improved technology. And because U.S. manufacturing output is today near an all-time high [3], the result is more output from fewer workers.

Workers released from manufacturing are now available to produce outputs that we would, absent the improved technology, be unable to produce. Additionally, the very possession and use of this technology itself is surely applause-worthy in the eyes of military hawks. After all, if war requires the use of more people in the military, today’s manufacturing technology ensures that American manufacturing output will not fall as much as it would otherwise as workers leave the private sector for the military.

Second, it’s highly misleading to write that China has “advantages” over the U.S. in manufacturing. Manufacturing is a single word that applies to a vast range of tasks – from very complex processes such as the production of miracle drugs to simple jobs such as sewing buttons onto blouses. While the Chinese do have a comparative advantage over Americans at some manufacturing tasks, Americans have a comparative advantage over the Chinese at other manufacturing tasks – a reality verified by the high and still-rising annual amounts of U.S. manufacturing output.

Third, whatever dependence we Americans have on the Chinese for militarily significant goods is dependence that the Chinese have on us (and on others outside of China) for goods, some of which surely have military significance. Perhaps the single greatest error that people commit when worrying that trade jeopardizes national defense is failure to recognize that trade, by creating mutual and mutually advantageous dependencies, itself reduces each country’s incentives to go to war.

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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