Here’s a letter to F&D Magazine.
Editor:
Gordon Hanson lists four options for dealing with unemployed (and underemployed) workers in locales hit especially hard by job losses (“Righting Globalization’s Wrongs,” June 2026). He dismisses three of these options: protective tariffs, means-tested targeted assistance, and free markets. His preferred option is a set of “policies that promote local economic development.”
He rightly rejects tariffs and targeted assistance. He also rightly recognizes that local economic development is key. But he mistakenly presumes that such development and free markets are alternatives to each other. In fact, not only is local development possible when markets are free, evidence shows that local markets that are relatively free of government intervention have already ‘solved’ the problem that commands Mr. Hanson’s attention. Indeed, the localized harms that Mr. Hanson and his “China Shock” co-authors attribute to free trade were likely caused instead by government intervention in those locales.
Middlebury College economist Gary Winslett reports that over the past 35 years manufacturing and employment have boomed in the market-friendly Sun Belt. He explains: “The Rust Belt’s manufacturing decline isn’t primarily about jobs going to Mexico. It’s about jobs going to Alabama, South Carolina, Georgia and Tennessee…. This migration didn’t happen by accident. It was driven by specific policy choices. States such as Tennessee, Alabama, South Carolina and Texas have aggressively courted manufacturers by promising business-friendly policy environments.”
All governments need to do is get out of the way.
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
