Tuesday, March 8, 2011

Protectionism is pseudoscience

No matter how many times I say it, or how many other people say it, or how much research they have to back it up, or how much historical evidence we have, or when the scientific consensus is so strong that Paul Krugman and the Cato Institute come to the same conclusions, there will always be people who oppose free trade. I no longer think it's appropriate to refer to these people as skeptical of free trade.

Borrowing from the bloody climate debate, I think the only appropriate label for the opposition is "free trade deniers." I'm not the first to coin this term, a google search today kicks back 36 results, but I will wield it with the full brunt of a real scientific consensus. If you think the near-unanimous agreement of all relevant experts in a scientific field holds any weight, than the consensus for free trade should mean something.

And if you want more proof that protectionism is pseudoscience, than look at its prominence at the faux-intellectual anti-science cesspool Huffington Post.


  1. 38 results now - including your blog post and home page, lol

  2. I finally made my mark on the world! Today Google results, tomorrow, the world!

  3. I don't know if this explains why people who deny the benefits of trade aren't dismissed like climate change deniers BUT - it might have to do with the fact that economics is not a "hard" science.

    Economics is a social ("soft") science, and there's a lot left to be explained about human behavior - even in terms of consumers and traders.

    One problem I have with economic models is that they almost always fail to take into consideration people's lack of perception of externalities and long term consequences. Economic models consistently make the assumption that consumers and producers will function logically - but humans aren't entirely logical.

    It's not enough for me to abandon free-trade entirely, but free trade has its loop holes and my understanding of humanity is that we can together predict potential problems and plan contingencies.

    Slightly unrelated example of successful government contingency: http://www.tritech.com/TriTech-Docs/CaseStudies/MinneapolisBridgeDisasterCaseStudy_08.aspx

    Also talked about a bit here: http://www.freakonomicsmedia.com/2007/08/06/lessons-from-the-bridge-collapse-in-minneapolis/

  4. Jeremy, someday you and I need to sit down so I can leard more about your views on globalization.

    There are a lot of advantages to free trade, including the coordination solutions I think you were addressing with your links (love that idea of a spike in cell phone use as a warning sign) but I think the most important part of free trade is commerce.

    As I wrote on 07/25/2010

    "Free trade is not conducted like a peaceful end to a Mexican standoff, where both sides uneasily cooperate in hopes their opponent will do the same. We do not allow other nations to import to America as a compromise so that we can export goods to them, as I've written before. Instead, we benefit from imports directly because Americans can now buy cheap goods and save money..."

    Free trade is a way for people to cooperate and divide labor all over the world. Nations are not relevent economic entities, and free trade is a policy that reinforces that notion.

    1. Michael, as posted earlier, I object to the term "free trade," prefering "government-enforced markets of exchange." Government is required for free trade to exist (who else is going to enforce those contracts spelling out terms of exchange and private property?)

      Obviously, I can't agree with the notion that "nations are not relevant economic entities" as they create and maintain the currency of exchange; provide police, fire, and military services that ensure peace and security; develop infrastructure through which commerce flows (railroads, highways, streets, electrical grids, water systems, the internet); and maintain the legal system that upholds exchange and property rights. And that's just for a start.

      Surely you're aware that throughout history, nation states have established, maintained, and even directed markets. In 1600, England granted a Royal Charter to the East India Company, a British joint-stock company formed for pursuing trade with the East Indies. Eventually, with England's blessing, it developed its own army which it used to control major portions of India. And, of course protectionism was the first economic policy implemented by the United States government after independence from Britain. America used tariffs to shield the U.S. industrial and agricultural economy from more efficient British goods. And, it worked! And finally, the export-led economies of East Asia, the prime example being China. If ever there were a Nation State that was a "relevant economic entity" it would be China. From devaluing the Yuan, to promoting export-led industies, to sourcing energy sources and raw materials in Africa, to forcing foreign multinational corporations to "partner" with Chinese state enterprises so that, one day, the Chinese enterprise can manufacture the product in question on its own, China has been "relevantly" interfering in the economy.

      You made the statement that "...we benefit from imports directly because Americans can now buy cheap goods and save money..."

      This statement is true providing that the ability to purchase cheap goods is Americans' primary interest. But, it's not. Americans are also concerned with maintaining an industrial base for defense purposes. Frankly, I think that all components going into key defense initiatives, and especially electronic components, should be made in America.

      In addition to defense concerns, Americans are, of course, worried about jobs being outsourced to foreign countries. You reach a trade-off point where your ability to buy those imported cheap foreign goods is seriously offset by your lack of a well-paying job.

      Anyway, just a few ramblings. Thanks for the platform to post.

    2. Free Trade does not mean free markets, it means a lack of barriers to trade. You have reiterated a majority of protectionist arguments, but this is not an article on that debate. This is about it free trade having the support of a scientific consensus. Do you have anything to say about the consensus?

    3. If only there had been a Frenchman who wrote a book some 170 years ago that eviscerated the majority of protectionist arguments...

      Wait a minute...

  5. I'd definitely like to connect in person again - but between spending time with my wife, work, the Green Party and my infantile beginnings of freelance web design - I've been struggling to find free time. Joel reminded me about his b-day party, and I had intended to go, but Elise has been very sick. Is he someone you'd like to loop into that conversation?

    In the mean time, I don't mind discussing globalization online when I can.

  6. I have no objection to free trade. I have MAJOR objection to calling the research 'scientific.' since Economics is a soft-science at best, and that's being generous.