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Trade Is A Tool

Here’s a letter to a constant correspondent:

Mr. McKinney:

You write that my Christmas Day “Quotation of the Day” is “cheap word play.” In your view, trade is not, contrary to my argument, a technique of production, but instead “a technology which lets foreigners destroy our ability to produce.”

I could keep my reply short simply by pointing out that, with real per capita GDP in the U.S. today at an all-time high – and with America’s industrial capacity today being a mere 0.6 percent below the all-time high that it hit in December 2016 – the factual foundation of your e-mail couldn’t be flimsier if it were constructed out of yesterday’s Christmas wrapping paper.

But I want to try once more to make the case that trade is indeed a technique of production – or better yet, a tool: The very essence of a tool (or a useful technique of production) is that it increases the return produced by the exertion of human labor. In doing so, tools save labor; exertions of human effort that would be worthwhile in the absence of a particular tool become wasteful if that tool exists.

The same is true of trade. Trade enables us to get more in return for our labor than we can get absent trade. In this sense, trade truly is a tool. Like all tools, it extends the productivity of our labor and, hence, renders some particular jobs unnecessary.

If you oppose trade because it destroys particular jobs, you must, if you wish to be intellectually and ethically consistent, also oppose tools – all tools. If your understanding of trade is correct, an unprecedented cornucopia of material abundance awaits us if we were to destroy, along with trade, all other tools, from controlled fire and the wheel to AI. But if you realize (as of course you should) that we would cast ourselves back to the Pleistocene by trashing the likes of fire, wheels, levers, pulleys, boxes, hammers, motors, computers, and dynamos, then there’s no good reason for your continued hostility to the remarkably productive tool called “trade.”

Donald J. Boudreaux
Professor of Economics
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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