FREE TRADE….Since I’ve gotten several emails about this, it’s probably worth pointing out that I didn’t intend the previous post to imply that trade agreements are bad things. I don’t think they are.
Rather, I just wanted to point out that they have their downsides as well as their upsides. This is something that’s obvious to anyone who wasn’t comatose during the trade debates of the 90s, but I found Josh Bivens’s post about the Stolper-Samuelson Theorem interesting because I hadn’t realized there was such unanimity that semi-skilled workers always suffer from trade agreements. That seemed worth a link, since I figure my readers are mostly non-economists like me and might well not know this.
The solution to this problem is much harder than merely pointing it out, of course. Should we accept certain restrictions on trade? Plow money into education for displaced workers? Pair up trade agreements with legislation on labor standards that helps out the working class?
This is the argument currently taking place at TPMCafe over Gene Sperling’s new book, The Pro-Growth Progressive, and various people are taking various sides in this debate. If you’re interested, check it out. The point isn’t that trade is bad per se, the point is that politicians frequently make promises to help out those who are hurt by trade agreements, but then quickly lose interest in those promises once the agreement passes. That inevitably produces public opposition to future trade agreements, and in the end this hurts everyone. That’s something worth paying attention to.
UPDATE: Atrios is right. Opposition to trade agreements doesn’t hurt everyone. That was sloppy wording. I just meant that free trade is broadly positive for the economy, so we’d all be better off if we can retain public support for free trade by promising to help out those who are harmed by it. See this post for more.