Landsburg on Free Trade

Here’s another great passage from Landsburg’s The Big Questions.   Here he discusses the moral implications of a common hot button issue, foreign trade:

Princeton Professor Alan Blinder has recently estimated that 30 to 40 million Americans face the prospect of losing their jobs to lower-paid foreign competitors.  Or in other words, all Americans face the prospect of lower prices for the output of 30 to 40 million workers. That’s good, though of course 60 to 80 million would be better.

The italicized sentence made me smile.  That’s an excellent way to frame it.  We never think of it that way.  We  disassociate jobs from output or what we buy at the stores.  Or we assume that somehow the costs of the good, high paying jobs are magically absorbed by shareholders of a company rather than paid by customers.

It gets better:

Let’s start by observing that there is almost surely no such thing as a net loser from free trade.  (I owe this observation to George Mason University professor Don Boudreaux.) I doubt there’s a human being on earth who hasn’t benefited from the opportunity to trade freely with his neighbors.  Imagine what your life would be like if you had to grow your own food, make your own clothes, and rely on your grandmother’s home remedies for health care.

Even if you’ve just lost your job, there’s something fundamentally churlish about blaming the very phenomenon that’s elevated you above the subsistence level since the day you were born.  If the world owes you compensation for enduring the downside of trade, what do you owe the world for enjoying the upside?

But let’s sweep that observation under the table and pretend it somehow makes sense to morally isolate the effects of a single new trading opportunity or free-trade agreement.  Surely we have fellow citizens who are hurt by those agreements, at least in the limited sense that they’d be better off in a world where trade flourishes, except in this one instance.  What do we owe these fellow citizens?

One way to think about that is to ask what your moral instincts tell you in analogous situations. Suppose, after years of buying shampoo at your local pharmacy, you discover you can get the same shampoo cheaper on the Web.  Do you have an obligation to compensate your pharmacist?  If you move to a cheaper apartment, should you compensate your landlord?  When you eat at McDonald’s, should you compensate the owners of the diner next door?

Public policy should not be designed to advance moral instincts that we all reject every day of our lives.

I can imagine some comebacks, but none that make sense.  Certainly, some people will try to convince us that they pay more for some products to help support some group of people (e.g. fellow countrymen, locals, union member and so forth) and they might.  I do on some products that I buy. That’s fine.  It’s a free country, isn’t it?  Which is why they shouldn’t be able to force their buying preferences on the rest of us.

They should first recognize that they don’t pay more for all products and services they purchase to help some group of people “keep their good-paying jobs.”  Some things they buy purely for the value it brings to their own lives with little regard for the people on the other end making it for them.

They should also recognize that not everyone shares their own purchasing preferences and that’s okay.  Again, it is a free country.

To me, the idea that we should buy something primarily for the welfare of the workers producing it rather than buying the best product available seems unAmerican.   That seems to be like crowning a baseball or football champion based on something other than the games the team won.   Or, basing the promotion of someone from middle management to the executive suite on something other than the merits of the person’s performance.



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