… is from pages 140-141 of the 2015 Fourth Edition of Dartmouth economist Douglas Irwin’s superb volume, Free Trade Under Fire:
Because exports increase the number of workers in relatively more-productive, high-wage industries, and imports reduce the number of workers in relatively less-productive, low-wage industries, the overall impact of trade in the United States is to raise average wages. Conversely, any policy that limits overall trade and reduces both exports and imports tends to increase employment in low-wage industries and reduce employment in high-wage industries. Restricting trade would shift American workers away from things that they produce relatively well (and hence export and early relatively high wages in producing) and towards things that they do not produce so well (and hence import and earn relatively low wages in producing) in comparison to other countries.
DBx: Indeed. And so when a protectionist or a proponent of industrial policy tries to sell you on a scheme to use subsidies and protective tariffs to enrich ordinary people, point that person to Doug’s book (now deservedly in its fifth edition). Ask that person if he or she has read it.
That question will end the conversation, for you can be sure that the (honest) answer is “no.” Peddlers of protectionism – past and present – almost never bother really to learn the case for free trade; they never study carefully the works of scholars such as Adam Smith, Jean-Baptiste Say, David Ricardo, Frédéric Bastiat, Richard Cobden, Henry George, Jacob Viner, Gottfried Haberler, Fritz Machlup, William Allen, Harry Johnson, Leland Yeager, Robert Mundell, Jagdish Bhagwati, Arvind Panagariya, Pierre Lemieux, Dan Griswold, Doug Irwin, Dan Ikenson, Scott Lincicome, and Johan Norberg. Instead, protectionists content themselves with their straw-man concoctions of the case for free trade. After all, straw men are so much easier to slay than are the real McCoys.