Ryan Bourne
Ryan Bourne
In a New York Times essay just before Christmas, American Compass’s Oren Cass once again blasted economists for refusing to cheerlead Donald Trump’s tariffs.
It’s the same tune he’s been humming for years: the trade deficit is a calamity (it isn’t), globalization alone sparked “deaths of despair” (not the case), trade with China is unremittingly awful for US workers (nope), and the case for free trade rests solely on simplistic comparative advantage “theory” and dodgy modeling (not, say, real-world evidence). The only new argument is Cass’s claim that we free traders at Cato, confronted by free trade’s disastrous economic effects, have suddenly pivoted to justifying free trade on grounds of individual liberty—an additional benefit we’ve actually discussed for decades.
Look through the fog, however, and Cass’s whole argument really hinges on this melodramatic retelling of recent US history since China joined the WTO. He paints a landscape of vanishing factory jobs, tumbling industrial output, and shattered communities, for which economists are apparently culpable given their unwavering advocacy of free trade dogma.
In fact, Cass thinks economists should take a leaf from the book of Seinfeld’s George Costanza. In the episode “The Opposite,” Jerry advises George that because his instincts have always been wrong, resulting in his loser life, making the opposite decisions might help reverse his fortunes. He tries it and it works! Cass therefore asks: given globalization has so miserably failed, why aren’t economists similarly flipping the script and cheerleading for tariffs and industrial policy?
Plenty of economists have already picked apart Cass’s logic on economics, trade theory, and the empirical evidence, so I won’t repeat those points here. Instead, I’ll just note two high-level problems with Cass’s argument that perhaps explain why most economists aren’t penning their mea culpas.
First, it’s laughable to assume that if a policy happens alongside some bad outcomes, » Read More
https://www.cato.org/blog/mess-compared-what-mr-cass
