In my column for the March 23rd, 2011, edition of the Pittsburgh Tribune-Review I wrote of the similarities between protectionism and Luddism . You can read my column beneath the fold.
Protectionism echoes Luddism
From the dawn of modern economics — lit by the beaming light of scholarship that is Adam Smith’s 1776 book “The Wealth of Nations” — one consistent insight shared by most economists is that political borders are economically irrelevant.
Such borders might be relevant for national-security, diplomatic or cultural purposes. But there’s nothing about a political border than changes either the motivations for people to trade or the economic consequences of those trades.
If it is advantageous to a newspaper to buy my column-writing services and for me to sell such services to that newspaper, the fact that the newspaper is located in a different political jurisdiction (Pennsylvania) from the jurisdiction in which I live (Virginia) does nothing to diminish the advantages of trade. We both gain.
And as with all trades, there are also likely some “losers” — persons who would be better off if the Trib and I didn’t trade with each other. Every inch of space that my column consumes in the Trib is an inch of space that some other columnist could fill if only that space weren’t used to display my pedestrian prose. Western Pennsylvania surely has in residence at least a handful of people who might have become paid columnists for the Trib were I not one of its columnists.
It’s fashionable among critics of free trade to scoff at such an example of trade between Pennsylvanians and a Virginian. (Actually, I’m an immigrant to Virginia from Louisiana, but that’s a matter for another column.) “Pennsylvania and Virginia are in the same country,” sneers the critic, “so this example doesn’t apply.”
Why, though, doesn’t it apply? Pennsylvania is a different place and polity from Virginia. Every economic consequence to which opponents of trade object for trades that cross national borders occurs also for trades that cross state borders, and every benefit that proponents of trade celebrate for trades that cross national borders occurs also for trades that cross state borders. There’s no economic difference between the two cases.
Fact is, we modern Americans regard free trading within the United States as legitimate because we’ve come to accept that our “natural” trading partners include all persons who live in America and not just those who live in Pennsylvania or Pittsburgh or Shadyside. Modern Europeans, in contrast, have not accepted that their natural trading partners include all persons living in Europe.
But this mental distinction that we draw between regions whose residents we “naturally” trade with freely and regions whose residents we don’t trade with freely is arbitrary. It’s no more (or less) natural or unnatural — no more (or less) good or bad — for a Pennsylvanian to trade with a Virginian than for that same Pennsylvanian to trade with a Canadian or a Singaporean.
Indeed, some of the “regions” we trade with are not geographical regions at all.
Consider the “region” I call “Technologia.” It is home to creative human ideas about how to transform raw materials and human labor into valuable goods and services. In Technologia, these ideas meet, mate, morph and mature. The result — consistently and spectacularly since the mid-19th century — is an ever-more-abundant profusion of goods and services that, for the first time in history, has raised the masses of ordinary men and women above the level of serfs and peasants.
Technologia exports the goods and services that its ever-more-skilled and numerous Technologian workers produce — workers with names such as “Motor,” “Stamper,” “Robot,” “Software” and “Solvent.” These workers toil with superhuman stamina and discipline, are paid nothing, receive no worker protections and never strike. And Technologia’s work force is forever learning to do, at consistently falling costs, what some American workers do.
Yet few of us worry about trade with Technologia, whose export agents keep cutting the prices charged for the many imports we receive from that highly productive region. We rightly celebrate our receipt of Technologia’s massive and low-cost outputs and understand that Technologia’s exports make us richer.
It wasn’t always so. This year marks the 200th anniversary of the birth of Luddism. In the early 19th century, many Brits worried that increasing mechanization of the textile industry posed an unfair disadvantage to flesh-and-blood workers. Many of these technology skeptics, known as “Luddites,” destroyed machinery in an effort to protect flesh-and-blood workers from the competition of Technologia’s workers.
Luddism, thankfully, is today embraced only by a small group of delirious romantics longing for imaginary pastoral bliss.
Hopefully, protectionism will soon go the way of Luddism, freeing us from the superstition that trade with foreigners is less enriching than is trade with fellow citizens.