Talk About Trade

by Don Boudreaux on December 26, 2018

in Myths and Fallacies, Trade

Here’s a follow-up letter to Mr. T.Y. Holman:

Mr. Holman:

In response to my last letter you write that trade with foreigners differs from trade with fellow citizens “because people do fear trade with foreigners is worse than trade with ourselves.” In your view, this fear is “all that’s necessary” to justify protectionism.

I disagree, and for reasons too many even to list in a single letter. So I here offer only two.

First, the fact that no one compels Americans to buy imports, combined with the fact that Americans must be compelled not to buy imports, is powerful evidence that we Americans in practice – when spending our own money – actually do not “fear trade with foreigners.”

Second, while I agree that many Americans have in the abstract a fear of trade with foreigners, I disagree that this fear justifies protectionism. This abstract fear is the unfortunate product largely of the biased – indeed, deformed – ways in which we conventionally talk about international trade. Calling an excess of imports over exports a “deficit” – referring to low-priced imports to America as being “dumped” in America – speaking of jobs as being “exported” abroad or as “stolen” by foreigners – singling out trade with foreigners as a unique source of job losses – the ridiculous yet commonplace sports metaphors – the incessant talk about countries “competing” economically against each other – the description of tariffs as restraints on imports or on foreign suppliers rather than as restraints on domestic consumers – these and other misleading “habits of the lip” (as the economist Deirdre McCloskey might describe them) create a wholly mistaken impression of trade.

We Americans do not need tariffs and other counterproductive policies; instead, we need a wholesale change in the ways in which we talk and write about international trade.

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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