Thursday, May 29, 2008

More on Trade's Shifting Winds

Robert Driskill, an economics professor at Vanderbilt University asks "why do economists make such dismal arguments about trade?" in Foreign Policy arguing:

Any time a change in economic circumstances creates both winners and losers, the judgment of whether such change was good or bad for the group as a whole is problematic. It becomes a matter of moral philosophy, not number crunching. Economists, as a result of their training, have no more claim to know what is “good for the country” than Joe Sixpack. It’s really that simple.
No, I don't think it is. Greg Mankiw is skeptical (rightfully I think). The Economist also weighs in pointing out the additional relationships between technology and commerce. I don't buy Driskill's view that when economists describe the macro effects of trade they in effect are making a moral proclamation when they point out that there is a net gain in wealth. Further, I think the unease relative to trade is not so much about trade itself but that constant fear of change. Trade becomes an easy bogeyman that politicians can point fingers to of why companies are unable to compete and why they close when it's also empirically easy to point to the plethora of evidence of rising incomes and greater purchasing powers as a result of that same trade - particularly for the most vulnerable.

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