Doug Irwin is among the interviewees – and he’s great.
……
Content Editor, Planet Money
Sir or Madam:
Kudos on your “Summer School 5: 250 years of trade history in three chapters” (August 7th). Yet it misfires in two places.
First, while it’s true that whenever American consumers buy more imports some American workers lose particular jobs, it’s misleading to single out international trade as a categorically distinct or especially significant source of job destruction. It is neither. Anytime American consumers alter their spending patterns or production techniques – which is incessant – some American workers lose their particular jobs while other Americans gain better job opportunities. Reductions in the number of Americans who smoke, increased participation of women in the workforce, improved automotive quality, changed diets, changed clothing fashions, changed demographics – these and countless other economic changes have little or nothing to do with international trade yet each ‘destroys’ some particular jobs and creates others. Not only is international trade not a categorically distinct source of destruction of jobs, in an economy as large and as dynamic as America’s the number of jobs ‘destroyed’ regularly by ordinary, purely domestic job churn is magnitudes larger than is the number of jobs destroyed by international trade.
Second, the Harvard economist Gordon Hanson (who you interviewed) committed a faux pax when he said that we make “our markets more accessible to other people so that we can import French wine and Italian fashions and semiconductors from Taiwan, and they would return the favor by allowing us to export pickup trucks and cellphones and digital services to their economies.”
This statement is backwards. We don’t import in order to gain the “favor” of being able to export; we export in order to enjoy the benefits of imports. The “favor” that we receive from trade with foreigners is not measured in what we send to them but, rather, in what we get from them.
Prof. Hanson undoubtedly is aware of this reality – a reality that makes it important that we economists write and speak carefully in order to reverse the commonplace practice of describing exports as benefits and imports as costs. In reality, our costs of international trade are our exports and our benefits are our imports. Until this simple but vital fact is widely accepted, public discussions of trade policy will remain deeply confused and misleading. And it will not be more widely accepted as long as exports are spoken and written of as benefits.
Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030
