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Home / Carpe Diem / Alan Blinder on the public’s misunderstanding that free trade is really just a form of technology – Publications – AEI

Alan Blinder on the public’s misunderstanding that free trade is really just a form of technology – Publications – AEI

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AEI Alan Blinder on the public’s misunderstanding that free trade is really just a form of technology From Alan Blinder’s essay in Foreign Affairs “The Free-Trade Paradox” that outlines some of the reasons the public doesn’t understand or support free trade and how that has allowed The Mercantilist-in-Chief “to push so many Americans into sixteenth-century thinking”: New technologies destroy (and create) far more jobs than trade does. But despite sporadic fears of robots, it is hard to find anyone today who advocates blocking technological progress on the grounds that it will cost jobs. Rather, job losses caused by technological advances are shrugged off as inevitable, part of the price of progress. But job losses due to trade are blamed on specific villains, and people try to prevent

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Alan Blinder on the public’s misunderstanding that free trade is really just a form of technology

Alan Blinder on the public’s misunderstanding that free trade is really just a form of technology - Publications – AEI

From Alan Blinder’s essay in Foreign AffairsThe Free-Trade Paradox” that outlines some of the reasons the public doesn’t understand or support free trade and how that has allowed The Mercantilist-in-Chief “to push so many Americans into sixteenth-century thinking”:

New technologies destroy (and create) far more jobs than trade does. But despite sporadic fears of robots, it is hard to find anyone today who advocates blocking technological progress on the grounds that it will cost jobs. Rather, job losses caused by technological advances are shrugged off as inevitable, part of the price of progress. But job losses due to trade are blamed on specific villains, and people try to prevent them.

Economists see technological improvements and freer trade as similar in their effects. They both offer higher living standards to the majority at the expense of job displacement for the minority. Improvements in technology, moreover, have been prime drivers of expanded international trade. The invention of ships capable of traveling long distances, jet aircraft, shipping containers, and telecommunications probably did more to boost trade than all the trade agreements ever negotiated.

But most people—and therefore the politicians who represent them—see no contradiction in supporting technological advances while opposing freer trade. Raging at the machine seems stupid, but raging at foreigners does not. The politics also work better. Unlike Silicon Valley, foreign exporters have no representatives in Congress (although they do hire lobbyists) and make convenient scapegoats for demagogues such as Trump.]

MP: You might be a protectionist if your embrace of sixteenth-century mercantilist thinking prevents you from understanding that international trade is really just a form of technology that significantly raises America’s living standards for the majority at the expense of some job displacement for the minority.

See Venn diagram version above.

Alan Blinder on the public’s misunderstanding that free trade is really just a form of technology
Mark Perry

Mark Perry
Mark J. Perry is concurrently a scholar at AEI and a professor of economics and finance at the University of Michigan’s Flint campus. He is best known as the creator and editor of the popular economics blog Carpe Diem. At AEI, Perry writes about economic and financial issues for American.com and the AEIdeas blog.

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