Kyle Handley
Kyle Handley
Recent critiques of international economics may surprise many actual economists. The latest rap against my profession is that we economists were too ideological and optimistic about the benefits of open trade and global markets while ignoring job losses, industrial decline, and economic distress in the United States. One recent op-ed went so far as to suggest trade policymakers do the exact opposite of what economists suggest. Recent tariff announcements from the Trump administration indicate this mindset may have already taken hold.
This narrative is seductive, but it’s also selective and false. Doubling down on protectionism will only entrench special interests who work to sustain a different, flawed system that delivers private gains at the nation’s expense.
To the frustration of many presidents, economists have earned their “dismal science” moniker by attaching ranges, uncertainty bounds, and warnings to their advice and predictions. While most economists would argue with certainty that there are overall gains from trade liberalization, they’re quick to add that there will be winners and losers.
But if you do the opposite by raising trade barriers, not only will there be winners and losers, there will also be net losses, along with new interest groups defending the protectionist spoils. An important objective of economics is to measure properly and attribute gains and losses, independently of which groups yell loudest.
Perhaps economists did not always emphasize the losses part of the ledger enough. It’s also true that many economists didn’t understand how long it would take for labor markets and displaced workers to adjust to shocks of any type, not just those from import competition. New research (from economists!) has shed light on the adjustment challenge, and—far from being bound to any ideology—my colleagues and I have quickly incorporated it into our work.
Yet this doesn’t mean the overall gains from trade were wrong—and economists have created a substantial volume of research and new models to better understand it. » Read More
https://www.cato.org/blog/we-have-bad-globalization-narrative-not-bad-economics
