Here’s a rare chance to praise President Obama for being on the right side of an issue. Veronique De Rugy at The Corner
Washington is currently debating the wisdom of a new free-trade pact, the Trans-Pacific Partnership, which seems to have some advantages and disadvantages. But in principle, there’s really not much debate at all: Economists and Americans as a whole seem to support free trade pretty strongly.
Harvard professor Greg Mankiw writes about the economist consensus:
The economic argument for free trade dates back to Adam Smith, the 18th-century author of “The Wealth of Nations” and the grandfather of modern economics. Smith recognized that the case for trading with other nations was no different from the case for trading with other individuals within a society.
According to Smith, “it is the maxim of every prudent master of a family never to attempt to make at home what it will cost him more to make than to buy.” Just as no sensible person tries to make all his own clothes and grow all his own food, he said, no sensible nation will aim to achieve prosperity by isolating itself from other nations around the world. Smith was responding to a then-prevalent doctrine called mercantilism.
The mercantilists favored exports but were wary of imports. In their view, the revenue from exports allowed the accumulation of gold, whereas the purchase of imports drained a nation’s gold reserves. Smith turned this perspective on its head. A nation benefits from imports, he argued, because they expand its opportunities for consumption. Exports are necessary only because other nations have the temerity to want to be paid for the goods they provide.
And Timothy Taylor shares some interesting data about Americans’ position on trade. According to a recent Gallup poll, since the Great Recession, a rising share of Americans have started to view foreign trade as an opportunity rather than a threat.