Thursday, May 19, 2011

True, Yet Superficial

At The Big Questions (blog of Steve Landsburg), the good professor pushes a post laying anti-free-traders to waste. It seems like most of the commenters get it, but there are a few who are caught up in specific scenarios. One such commenter made an often-used observation about free trade as a rebuttal to Steve's point. DividedLine writes:

The problem is that while free trade is beneficial over all to a nation, it can lead to significant redistributions of economic privlidge within that overall national benefit. There are winners, and there are significant losers (lose your job, lose your health care etc.) This is a valid and deeply personal concern, and it is this concern that pushes the issue into the political forum. Without taking the political dimension into account, the message of the economics of the thing will fall on deaf ears.

The main thrust of his concern is rooted in truth - there are certainly immediate losers in the marketplace. And, in some ways, the more free and open that market is, the more such competition will be prevalent. This, of course, does not negate Steve's main point. But I think it's an interesting digression. I find it interesting that we hold this concern seemingly situationally. And even when we formally recognize it in other respects, we don't let it get in the way of trade.

For instance, why fear Mexicans taking your jobs as opposed to Texans or Floridians? For sure, different regulatory standards and levels of taxation may set some pegs against us as a country in terms of our labor force. On the other hand, the same factors set up various differentials throughout the states themselves as well. Should one state, for instance, consider not trading with another state that, perhaps, has a lower minimum wage and thus "unfair" advantage? I think most of us would find that pretty silly.

Well, what about the advent of capital that offsets labor? We're continually striving, through technology, to need fewer and fewer people to do the same old jobs. Farming that once took hundreds of workers now takes only a handful. The same goes for production of almost all stripes. This can just as easily, if not even more forcefully, put people out of work. Yet most of us acknowledge the benefit of such advances. The non-Luddites among us don't clamor to stop technological process on behalf of those whose labor may become displaced by it.

So then why, when it is a foreign entity in question, do we suddenly show grave concern for structural shifts in labor? It seems rather inconsistent to find this as some exception to the general economic rule. As horrible as it sounds, one has to wonder what role nationalism and xenophobia play here to some extent. For all the rhetoric of diversity, compassion, and unity, liberals find themselves in a weird position in many respects when the focus of conversation turns from other Americans and technology replacing our workers to people with different languages and skin-colors replacing them.


  1. I agree. Don Boudreaux and Russ Roberts make similar arguments at Cafe Hayek. I chalk it up to "civic religion," to the extent that the phenomenon actually exists, so I would say that you're on to something when you invoke "nationalism/xenophobia."

  2. I'll openly admit I hate resorting to that explanation - especially when it's liberals who are talking the talk on that subject. And maybe it's because of just some subconscious tendency (learned perhaps) that they're not supposed to be the people who do that; they're the compassionate ones, after all. Or at least that's how many of them market themselves. In any case, liberal or otherwise, I think I'd be grasping at straws to suggest any other serious reason(s). I'm certainly more than open to hear them out. But, inevitably, it always seems to wonder back to the same mis-guided sentiments.

  3. Well, one ends up in pretty much the same place with someone like Karl Denninger at market-ticker dot org, who has a knack for diagnosing the problem, but whose policy instincts are entirely populist (and thus collectivist, because the argument boils down to "we should all accept a lower standard of living for each other's sake").