Wednesday, July 24, 2013

The Choice

The Choice: A Fable of Free Trade and Protectionism
© 2006 Russ Roberts
128 pages


 Imagine that George Bailey in It’s a Wonderful Life had wrestled not with the impulse to throw himself off of a bridge, but with the decision whether or not to endorse a protectionist presidential candidate whose platform promised to bar all imports from American shores – and that he was guided not by Clarence, but by the ghost of a long-dead economist, who showed him two different versions of America: one with free trade, and the other with barriers to imports. This is the premise of The Choice: A Parable of Free Trade and Protectionism, which is like two of Roberts’ other works, a policy argument in the form of a novel.

Like The Price of Everything, it’s short on narrative despite having the most ‘storied’ premise. Instead, the work is a series of debate dialogues about economic issues that join together to constitute one larger argument for tree trade and against protectionism. Some points ring more true than others, for instance Russell’s/Ricardo’s demonstration of how total economic self-sufficiency impoverishes a society. He uses the example of a household that chooses to ‘bar the import of bread’ and begin manufacturing its own bread.  Certainly, this has advantages: homemade bread is of a far superior quality and can be made to suit one’s own tastes. But the time involved in making bread to satisfy constant demand for it will take away from other activities, even if the household chooses to consume less bread.  Other points don’t fly nearly as well, like Roberts maintaining that though American jobs will be through free trade, other opportunities will be created. In the book, an auto plant closes, and the children of that plant’s workers thus look for new opportunities in a pharmaceutical company that opens to sell drugs to Japan. If the plant hadn’t moved to Japan, not only would those children have taken the same job as their parents (bo-ring!), but Japanese people wouldn’t have had money to buy American drugs.  Yes, it sucks to be the parents, but life balances out in the aggregate. I don’t like this argument, and ironically just yesterday I heard Roberts saying he doesn’t like it much either*, as it stinks of utilitarianism.  It’s of poor consolation to the auto workers who lost their livelihood, but – life is change.  Roberts hasn’t quite convinced me, though now I understand more fully the reasoning behind free trade arguments. I balk at embracing the book enthusiastically, however, because Roberts uses such an extreme example to argue with: his choice is between free trade America and an America totally without imports. Pardon may be granted in that it’s difficult to make much of an argument between two more moderate stances, as distinctions are blurred.

Be forewarned: though a work of interest to those thinking on the merits of free trade, or attempting to understand  the economics of such,  this is on the dry side. Lively as Roberts’ writing is, policy debates about systemic interaction can only get so exciting.


*http://www.econtalk.org/archives/2013/07/michael_lind_on.html

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