Pat Buchanan recently penned a passionate defense of Donald Trump’s trade policies, defending the argument that free trade hurts Americans and that protectionism is required to keep a nation strong.
Despite enjoying unanimous support from every credible economist since the 18th century, free trade is still the issue that most confuses politicians, voters and commentators alike.
The basic claim is this: that by importing goods and services from other countries, Americans lose jobs, lose revenue and are generally made weaker compared to net exporters like China. This observation is understandable, and it’s a result of what French economist Frederic Bastiat called “what is seen, and what is unseen.” We all see news footage of closed factories in decaying industrial towns, and wish we could do something to help the people who have lost their jobs. What we don’t see are the benefits to American consumers of being able to purchase better quality goods at lower costs or the new jobs created in other sectors because of increased trade. We don’t see the benefits of diverting labor from inefficient uses to more efficient ones. These benefits are very real, but they are not as visible as the job losses that come from a changing industry.
Mr. Buchanan laments that the Chinese exported $482 billion worth of goods to Americans, apparently forgetting that Americans got the enjoyment of $482 billion worth of goods, something that would not have been possible if the government attempted to block trade from China.
The protectionist myth is easily debunked by reducing the analysis from countries, which are complex and hard to understand, to individuals. For example, I run a huge trade deficit with my local grocery store. I buy a lot of food from the grocers, and they buy almost nothing from me. But no one would say that the grocers are growing rich at my expense. I benefit at least as much as they do from the trade, or else I would not engage in it. Does anyone imagine that the government should force me to grow my own food, or can make me better off by imposing an additional tax on groceries? This is effectively what protectionists want to do.