I’m not surprised by EconLog commenter Jim Glass’s objection to my June 17th guest post at EconLog – a post with the intentionally provocative title “Trade Has No Losers.” This objection is one that, I’m sure, occurred to many people (including me). Here’s Mr. Glass’s comment:
I’m extremely all for free trade. So I must object that this sort of rhetoric *hurts* the free-trade cause among those most in need of convincing…
Someone who truly loses from trade is someone whose life would be better if she had never been part of a society in which trade occurs … This worker, even having lost a good job, remains far better off living in an economy with trade than she would be were her economy cut off from the rest of the world.
“I used to have a good career in the textile industry along Mass Route 128. Then textile trade opened up and the whole industry was wiped out. Now I’m on welfare living in my cousin’s basement. And you are saying I *haven’t* suffered a loss? Compared to if I was living in some phantom dystopia ‘cut off from the rest of the world’? WHAT?? ” Moreover, do you limit this argument to trade? Say it is 2009…
“I’ve been wiped out in the real estate crash. But you say I *haven’t* suffered any real ‘loss’ — compared to living in some poor backward country with no property rights in real estate? Like Mao’s China?? Then what is this 7-figure ‘loss’ on my balance sheet that my accountant, lawyer and the bankruptcy judge keep talking about?”
To the people who need to be convinced to support trade — the losers and their sympathizers — this argument is even worse than “Trade is good because gain to the winners exceeds the losses to you losers”, as it adds, “plus, you losers really haven’t lost at all but are actually better off for having had the opportunity to suffer your losses. We winners will now explain this reality to you losers, and teach you how you should be be grateful for being so better off for having had this opportunity. Just imagine if you all were living in the Congo.”
Tell that to people who have suffered real measurable $$$$ losses and their allies. Watch them pick up pitchforks and torches and march out to support Trump and his 60% tariffs.
Here’s my reply (here amended and expanded) that I posted as a comment to Mr. Glass’s understandable response:
Mr. Glass: I get what you’re saying. If my goal were to sell free trade to today’s voters, I’d write and talk differently than I do. But my goal is to get to the truth, as best as I can discern it, of economic matters, and then to tell this truth as clearly as my poor talents allow.
No one who loses a particular job will be fully mollified by an abstract argument that shows that the loss of that particular job resulted from a normal, indeed indispensable, part of a larger economic process that generates gains for most people – gains even, over time, for the individual who loses his or her job. I certainly understand this reality of the unemployed-worker’s response, and do not think it is suspended when the speaker or writer is an economist. Losing a job is an unhappy experience whatever the source of the job lost. This unhappiness is not much reduced for the unemployed person by his or her encounter with even the most brilliant analytical argument for why that job loss is just. And this reality holds if the job is lost to imports, to technology, or simply to changes in consumer tastes that have nothing to do with trade or technology.
Yet this person, at least in America, who loses a job nevertheless likely feels somewhat more uneasy complaining if that job is lost to technology or to changes in consumer tastes than if that job is lost to imports. This person doesn’t know just why he or she feels less put-upon – feels less the victim of a preventable injustice – if this person’s job is lost to technology or taste changes than if it’s lost to imports. But it comes from the widespread acceptance by fellow Americans (and likely also by this individual) that none of us has a right to prevent others of us from using new technology or from changing our preferences.
Yet there is no such unease about complaining about the consequences of trade – which consequences, in fact, differ economically not one whit from changes in technology or consumer preferences. It is an appropriate task of the economist to point out this inconsistency regardless of the emotional state that the performance of this tasks elicits in others. As a purely scientific matter, I stand by my argument that international trade has no losers, and wish that it be judged on those grounds rather than on how well or poorly it will be heard by workers who lose jobs to imports.
And here’s a hope: because people have come generally to accept, however grudgingly, that complaining about jobs lost to technological advances or to changes in consumer tastes is unseemly, then they might one day come to have the same attitude about complaining about jobs lost to trade. But this latter, happy development will never occur if, because we don’t wish to offend the feelings of people who lose their jobs to imports, we persist in the lie that there is a categorical difference between trade and other sources of job losses.
I believe that precisely because too many people have been unwillingly to point out that losing jobs to imports is absolutely no different than is losing jobs to any other sources of economic change (most of which, especially in a country as large as is the United States, are purely domestic) that people who today lose jobs to imports react in the way that you correctly understand them to react. It’s a reaction based upon a faulty understanding of economics, and a defective ethic. The longer we persist in refusing to acknowledge that there is nothing unique about trade at destroying particular jobs, the more difficult will it be to persuade the general public to accept that a policy of free trade is truly in their best interest.
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A final thought: I suspect that you would not have objected to my post had it been about how free markets have no losers. Socialists and many people on the progressive left (and, admittedly, increasingly more people on the conservative right) might argue today that free markets have winners and losers, but very few regular readers of EconLog would say or believe such a thing. Economically and historically informed people understand that everyone alive today in market-oriented societies is far better off materially than he or she would have been were that person born and reared in a communist society or any where at any time prior to 1900 (if not even more recently). My confident guess is that you share with me the belief that no one alive today in the U.S. is worse off – indeed, not better off – than he or she would be if he or she lived in a non-market society.
And yet you and I also understand that there’s enormous job churn in market economies. If you encounter someone who lost his job, say, repairing automobiles because automobiles have become less likely to break down, would you describe this person as among the market economy’s losers? Would you criticize me if I were to point out that this person, despite his loss of that particular job, continues to reap enormous gains from living in a market economy? My guess (hope!) is that you’d do neither. If my guess is correct, why treat the person who loses his or her job to imports differently?
