By Arnold Kling
Angry Bear reports that some bloggers on the left have been having a debate on whether or not free trade is a good thing. In my view, those who think “not” are doomed to intellectual failure.
One of the good guys is Alan Blinder. I think that elsewhere Blinder has been quoted to the effect that if you are going to get bent out of shape about people saving time and money by having accountants in India do their taxes, then you might as well get bent out of shape about people saving time and money by using software to do their taxes.
Progressives should welcome freer trade because it’s so much better than the alternative. Protection serves to entrench entrenched interest groups. We’re supposed to be against that. Protectionism also amounts to legalized pickpocketing of the consumer, including those who can least afford it…
With sufficiently rigorous (and ridiculous) policies, the U.S. could have preserved the industrial structure of the 1950s…GM and US Steel would be bigger companies today, while Microsoft and eBay would be based in some other countries…It has long been a mystery to economists why so many people view creative destruction that stems from technology as okay, while similar creative destruction that stems from international trade is something to be opposed.
I believe that the solution to this mystery is ingrained tribalism and xenophobia. Economists view trade as an efficient production technique. Thus, Blinder equates outsourcing to India with outsourcing to software. Everyone else views trade as tribal war, in which “we” have to be on guard, because “they” are the enemy.