Unfair Trade Practices

Don Boudreaux of Cafe Hayek wrote a letter to the Milwaukee Journal-Sentinal about Senator Russ Feingold’ statement that “unfair” trade practices have led to the destruction of 64,000 jobs in Wisconsin.

Nobody thinks 64,000 people losing jobs is great.  But, what people like Feingold don’t consider is that there’s a positive offset to that which is much greater.  The problem with the offset is that it’s unseen, while a worker losing his or her job is easy to visualize.

What if Feingold said we have lost 64,000 jobs in the buggy-whip industry because we have allowed folks to purchase automobiles?

While this statement is essentially the same as Fiengold’s statement, it wouldn’t carry nearly as much punch for two reasons.

First, my statement identifies the workers as buggy-whip makers.  Second, it identifies the benefit as something people can clearly see as a positive trade-off.  We get cars at the expense of the of a few buggy-whip making jobs?  I feel bad, but I’ll take the car, thank you.

Boudreaux does an excellent job at identifying the workers and making folks think about the unseen effects that offset the 64,000 lost jobs in the last paragraph of his letter:

So Sen. Feingold’s accusation that freer trade is “unfair” simply because freer trade results in some workers losing particular jobs means that he must also regard as “unfair,” say, anti-smoking campaigns.  After all, such campaigns tempt consumers away from buying cigarettes and, sadly, result in job losses among tobacco-industry workers.

I would have changed “anti-smoking campaigns” to “anti-smoking laws”, which I think are more analogous to “unfair” trade practices.

Similar to the buggy-whip example, most people intuitively make the trade-off when presented with more information, even those with what Thomas Sowell calls the unconstrained vision.  Oh.  If we have to give up a few tobacco industry jobs to save a few lives, so be it.