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HAT Forum: Free Trade vs Protectionism

  • The 519 Community Centre, Rm 304 or tba 519 Church Street Toronto, ON, M4Y 2C9 Canada (map)

Quoting Harvard economics professor Nicholas Gregory Mankiw, "Few propositions command as much consensus among professional economists as that open world trade increases economic growth and raises living standards."

Despite this, a significant subset of non-economists are staunchly against free-trade, with an even larger subset who seem to be ambivalent. Here is a biased and incomprehensive list of points to consider:

Jobs

It is true that some jobs are lost from a country due to free trade, but the country overall tends to benefit because other countries can also buy things from them, and an optimum of comparative advantage can be reached. Analogy: imagine if every household had to build their own cabinets, cutlery, fridges, etc. Much better to let specialization take place.

War

There is evidence to suggest that more economic interdependence may reduce the likelihood of war.

"Bring Back Manufacturing"

A factory in the United States is likely to use a lot of robotics to reduce the amount of expensive American labour needed, whereas a factory in the developing world can simply hire a lot of people. Thus, the number of jobs that would be "returned" is actually much less than the numbers employed in the developing world, and the product price would also be higher.

Questions

1. What is the best way for society to decide on trade policy?

2. Should free trade be considered humanistic?

3. Donald Trump's campaign is economically protectionist. How concerned should we be?

4. Why has it been so difficult for economists to convince the public about free trade?

 

 

Earlier Event: February 4
HAT Forum; topic TBA