Positive Sum

Brad Delong:

In 1877, it was the United States that was the rising superpower across the ocean to the west of the world's industrial and military leader. Today it is China. In 1917 and again in 1941 it was greatly to Britain's benefit that America regarded it as a friend and an ally rather than as a competitor and an enemy. And since 1945 it has been greatly to Britain's benefit that America has regarded it as a trading partner rather than an industrial competitor.

There is a good chance that China is now on the same path to world preeminence that America walked 130 years ago. Come 2047 and again in 2071 and in the years after 2075, America is going to need China. There is nothing more dangerous for America's future national security and nothing more destructive to America's future prosperity than for Chinese schoolchildren to be taught in 2047 and 2071 and 2075 that America tried to keep the Chinese as poor as possible for as long as possible.

This is one installment in a back and forth Brad Delong has been having with Jeff Faux on trade.

While Delong is clearly correct, I want to make a meta-point. The "leftist" free trade argument, which is what Delong has been pushing, seems to be something like, "The poor in the world deserve more. So what if the (relative) rich in the first world lose a few jobs? They'll be okay. The poor of the third world need the jobs more." Following in the footsteps of my newest co-blogger's fondness of acronyms, I'll call this the "trade as economic justice" (TEJ) argument. Most of the discussion that follows in the comments centers on who actually deserves the jobs or would benefit more from the jobs. Delong's answer is the Chinese; Faux's answer is Americans. The TEJ argument turns into an exercise of choosing which set of people to champion.

I don't think this is a good way to frame the issue, nor do I believe it is the most accurate description of the facts. A better argument is the "trade as positive sum" (TPS) argument. It goes something like, "When people from two different countries trade, nearly everyone in those countries, and nearly everyone in the world, benefits. Yes, a few people will lose jobs and have to find new ones, but that's part of any dynamic growing economy, and "protecting" their jobs hurts other Americans and non-Americans, including ones more poor than those losing jobs, and in the long run even hurts those same Americans whose jobs are being protected."

The TEJ argument is leftist; the TPS argument is liberal. You can guess which argument I prefer. The TEJ argument is standard leftism: life as a zero-sum game, a battle of classes, good guys vs bad guys. It's a subjective appraisal of desert and fairness. The TPS is a more nuanced, though more difficult argument to convey, yet it's the only argument that bypasses the zero-sum biases most of us have. Trade is the clearest example of an issue in which one policy creates nearly unanimous positive-sum gains and the other creates narrow privilege and widespread harm.

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