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[–]postautisticeconman -5ポイント-4ポイント  (4子コメント)

A lot of this is very misleading. I have some serious economics training and can explain the sort of tricks that go into making the pro-trade case in there, and how people get at those (false) numbers about 90% of economists backing free trade.

1) Claims about free trade enhancing "welfare" rely on trying to add up the gains and losses from trade to see which is better. The seemingly sensible (but totally wrong) way to do this is to look at monetary gains and losses. So economists will look at this list: "man loses job (salary $50,000), corporation saves on labor costs (net savings $25,000), product is cheaper ($0.10 savings/product * 300,000 sales)". Well, that's $25,000 + $30,000 - $50,000. A net gain of $10,000! The problem, however, is that money doesn't directly correspond to value (or utility in econ speak). So, the man losing his job experiences the loss of $50,000 as much worse than that -- after all, that $50,000 is the difference between living a normal life and now losing the house and being unable to feed the kids. Meanwhile, the people buying the slightly cheaper product barely notice their extra 10 cents. The corporate CEO notices the $25,000 of savings, that's true, but $25,000 to the already rich is the difference between different feature packages on a BMW. So, yes, money is saved from trade, but value (utility) is lost.

Incidentally, most economists now this and are very very ambivalent about free trade. Those numbers GOP economists cite about 90% of economists backing trade? They come from polls that ask economists to answer just whether or not they think free trade produces monetary gains. Most economists will answer yes to that question, but will say no if asked whether or not trade actually is good for welfare.

2) Most pro-trade arguments are really anachronistic. They make sense in the distant past, when countries rally did have comparative advantages in producing specialized local goods (like in the textbook examples: my coconuts for your coal, or whatever). But we live in a very technological era. An American factory could be built just as well as in any other country. There's no comparative advantage anymore since everyone is just as good as everyone else at production.* The point is, with so many tasks being increasingly automated, we're reaching the point where all human labor is basically identically valuable (if any human labor is needed at all). And in that world, all free trade does is give an advantage to the people who are wealthy enough to own the capital (robots) that actually do production - the free trade laws will let them skirt national tax rules by moving overseas and such. (They alraedy do this to a degree. No coincidence that our lowest tax is the capital gains tax.)

*(Some economists will object that there are advantages to be gained from comparing education levels across countries. But this explanation can't be reconciled with data about the relative strength of the ed systems in European countries, or with data on the decline of the US ed system and the rise of the Asian one.)

3) Take the example of China. Economists will myopically try to explain their entire burst of growth as being just the result of expanded trade with America -- completely ignoring the process of liberalization China was going through at the time! Of course your economy will grow when you ease up on being a brutal dictatorship -- you can't give credit for that to trade. What the pro-trade people really can't explain is this: when trade fell during the Great Recession, why did China's economy keep growing strong? When trade began picking up afterwards (now), why has China's growth suddenly stalled? What's really going on is this. America's economy is founded on domestic consumption, not trade. And any country with strong domestic consumption can be economically independent and strong. China has been trying to switch from an export driven (Trade based) economy to one that relies on a strong domestic consumption market to drive their economy. Republican type economists share their party's nationalist fear of China growing strong, and want to keep China as America's sweatshop, rather than let them develop a domestic demand driven economy like the US. That's why when trade picked up after the financial collapse, China's growth began to backslide -- because their switch to a domestic driven economy began to backslide.

[–]mungis 5ポイント6ポイント  (2子コメント)

Those numbers GOP economists cite about 90% of economists backing trade? They come from polls that ask economists to answer just whether or not they think free trade produces monetary gains. Most economists will answer yes to that question, but will say no if asked whether or not trade actually is good for welfare.

http://dailysignal.com/2013/02/01/politicians-should-listen-to-economists-on-free-trade/

That's a summary of the Booth survey of economists.

There's no comparative advantage anymore since everyone is just as good as everyone else at production.

You're completely ignoring the cost of production. At the basic level output is a product of Capital and Labor. So, you're ignoring the capital side of that equation. As an example, if I can mine iron ore and smelt it on site creating steel, I would be reducing the costs of transport of ore, which would give me a competitive advantage compared to someone who had to transport the ore 1000km to smelt it (ceterus paribus).

[–]say_wot_again 1ポイント2ポイント  (1子コメント)

But don't you see, postautisticeconman already addressed that in their comment! The Booth survey is just GOP economists, and it only asks about monetary gains, not welfare gains! We should trust them, since they claimed on reddit to have "serious economics training!" /s

[–]postautisticeconman -1ポイント0ポイント  (0子コメント)

Just look at the China example. Why is there growth inversely related to global trade levels lately? It seems officially suspicious that nationalist economists don't want China to transition away from a trade based economy like the US did.