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Quotation of the Day…

… is from page 643 of Douglas Irwin’s indispensable 2017 volume, Clashing Over Commerce (footnote deleted):

What was the economic impact of NAFTA? For all the fears about a “giant sucking sound,” the United States experienced an exceptionally strong labor market in the mid- to late-1990s. The unemployment rate fell to less than 4 percent by late 2000, manufacturing employment held steady, and wages rose even for less-skilled workers. Imports did not cause a pronounced increase in worker displacement. While NAFTA accelerated the decline in apparel employment, studies showed that the agreement did not have a major impact on either net employment or gross job flows in other trade-affected industries.

DBx: Being an unconditional unilateral free trader, I believe that we Americans would have prospered even more had Uncle Sam removed, without requiring from other governments any reciprocity, all trade barriers obstructing our trade with non-Americans. But because nearly every government serves as a crony for powerful producer interests – and because widespread economic ignorance causes most people to misinterpret such cronyism as actions in support of the nation’s best interest – Uncle Sam was in 1994, as today, no more likely to adopt a policy of unilateral free trade than a madam in a whore house is to demand from her employees vows of chastity. Given this reality, NAFTA made trade freer than it would have otherwise been, and, hence, NAFTA is to be applauded.


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