4 ms·
You're right that there are distributional impacts, but I don't think your summary of the position of economists was very thorough. If anyone wants to learn mo
by brownbat 8y ago
You're right that there are distributional impacts, but I don't think your summary of the position of economists was very thorough.
If anyone wants to learn more about why economists almost universally, on both the right and the left, oppose barriers to trade, I'd recommend two things:
1) Learn how to calculate the deadweight loss due to trade barriers. There are a dozen good videos on YouTube explaining this. It's an elegant proof, but may take a few times through to really get:
https://www.youtube.com/watch?v=zhD--UeRiOI https://www.youtube.com/watch?v=zhD--UeRiOI
The distributional effects are generally acknowledged in any class discussing this, often including seques into trade assistance programs and how those work. In general though, focusing on local job losses tends to skew our intuitions, which are naturally bad at realizing the sheer magnitude of potential benefits. One way to grasp that is (2)...
2) Read a few of the countless studies on the cost per job saved of protectionist measures. Usually we ask consumers to spend hundreds of thousands more, sometimes millions more, for each job earning $30-60k per year.
Here's a table listing some of them:
https://www.forbes.com/sites/timworstall/2017/01/24/sure-protectionism-can-save-jobs-but-whats-the-cost-per-job-saved/#aaffe392ee9c https://www.forbes.com/sites/timworstall/2017/01/24/sure-pro...
Textiles, tires, there are a bunch of great studies that transparently lay out their methodologies, written by people who have taken more than just a couple econ classes.
Again, completely agree that there are distributional impacts within a country (although it's important to note that, taken globally, trade generally reduces inequality, transferring capital to poorer countries). But of the distributional impacts within a country, if you just taxed the category of good half of the savings to consumers, you would generally be able to pay everyone in the affected industry a lifetime severance equal to their salary (often double it), and still raise the purchasing power of everyone in the country. That would make literally everyone better off while hurting no one, if we just had the stomach for it.
- sverhagen 8y agoMaybe I misread the article, but it felt for me that it was more arguing against benefits for the big boxes than it was trying to argue for special treatment or just money for the downtown merchants. Is that still protectionism?
- brownbat 8y agoI think you're right that protectionism is not a great analogy here.