Making the practical case for freer trade

Abstract

As has often been observed, support for free trade and opposition to protectionism are the prescriptions for economic policy that are the most broadly, if not universally, shared among professional economists. Indeed, even those few who would argue for interventionist trade policies in selected circumstances would be hard pressed to find a persuasive rationale for most existing trade interventions as enhancing the usual conception of a nation's general economic welfare. For instance, it may be possible to construct a logically tight case for supporting, with subsidies or temporary trade protection, some high-technology industries that are expected to generate positive nonpecuniary externalities within the national economy. The naive might even believe that real-world political processes actually allow most governments to implement consistently such beneficial interventions, without opening the door to a host of more dubious activities. However, surveying the range of actual trade interventions of, for example, the United States, it is difficult to see how import restraints for textiles, steel, or automobiles are allowing dynamic comparative advantage to be developed in these industries; and the same may generally be said for many of the protectionist policies of other nations. It is on such specific issues, would emphasize, rather than on the abstract principle of absolute free trade, that the practical and important battle over freer trade versus increased protectionism is actually won and lost. Thus, as the keynote for this paper, it is fair to ask the following question: if economists have so long and so generally agreed about the virtues of freer trade and the evils of protectionism, why have we not been more effective in persuading others of the merit of our position. As see it, the situation is rather like that faced by a famous preacher who recently called his congregation together to pray for an end to the long California drought. My friends, he said, I want to thank you all for coming here today, when so many others might ridicule our efforts. But, have for you a question. You all know why we are here. What want to know is-where is your confidence? Where is your belief? Where is your faith? Where are your umbrellas? Similarly, as economists imbued with the true faith and preaching the virtues of freer trade, we need to ask: why do we not more consistently inspire other people to take up the intellectual umbrellas that guard against the evils of protectionism? On this question, would first like to offer one important qualification, then consider two relevant answers, and finally conclude with three suggestions.

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