Here’s a letter to the Wall Street Journal.
Editor:
Gerard Baker displays his usual impressive wisdom in decrying President Trump’s second-term pursuit of a misguided and extreme ideological agenda (“What Happened to the Pragmatic Trump of the First Term?” May 4). But Mr. Baker himself inadvertently grants the validity of one of the premises that fuels that extremism when he writes of “the elevation of international capital that ravaged communities at home.”
The correct name for “the elevation of international capital” is “free trade.” Why not use this term? It better reveals the innocent increased freedom of ordinary people to spend their incomes as they choose, while avoiding the mistaken suggestion that a lowering of trade barriers benefits only Davos-vacationing capitalists at the expense of the masses.
And where are these “ravaged communities at home”? Politicians and pundits incessantly talk about these communities, but serious attempts to locate them encounter difficulties. The economist Jeremy Horpedahl studied the ten metropolitan statistical areas in the U.S. that suffered the largest negative hits during the infamous “China Shock” of a quarter-century ago. According to Horpedahl, “all of the MSAs hit hard by the China Shock still managed to have significant and positive real wage growth across the distribution since 2001…. Wage gains in several of these places, in fact, are better than the national trends.”
Whenever economic change occurs, some particular workers lose jobs, and some particular locations lose business and population. Economic growth requires economic change and adjustment. It always has and always will. But the story of America is that ordinary people not only recover over time, but become wealthier. It’s an error to single out the freer trade of the past few decades as a unique source of economic change that justifies greater skepticism of globalization.
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
