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« Enterprise surveys and binding constraints | Main | In trade, no gain if no pain »

May 09, 2007

Comments

Conan the Barbarian, Ph.D.

Free trade good?

Free trade bad?

Pick one. Nuance make my head hurt.

Daniel

And by fleshing out arguments for your narrow position, you can hopefully force those 'barbarians' on 'your side' to stop making it so easy for opponents to set up straw man arguments against you.
Also, hopefully forcing fellow free-traders to provide arguments for more nuanced positions themselves.

Edward

By publishing information suggesting something is not all it's cracked up to be, then essentially you're helping to uncover poor economics. And this is not so much a decision to be made, as an academic obligation.
A fear of being misunderstood and misused is justified, but it's only through an open exchange of information that a well-reasoned conclusion can [eventually] be reached.

KY Choong

Professor Rodrik - if this "more nuanced case for international trade" is the right direction to take, then go for it. A suggestion. It may help to "brand" your position and, if possible, recommend something concrete. Greg Mankiw's Pigou Club seems a good way to do this. This probably reflects ignorance on my part, but I don't know what exactly your nuanced case is. Could you perhaps think of a short tag line that summarises your position? (Please avoid something abstract like "the third way".)

wjd123

I think the economic profession has a lot to answer for. For instance, most economist supported NAFTA. Seven years later they were still supporting it and I was still hearing about the benefits of comparative advantage. In that time I never heard about factor-price equalization. That would have been an economic reason for not signing NAFTA. It should have been part of the economic argument before NAFTA was signed. I'm sure it would have been important to American workers.

Years later I heard about it by accident. I woke up in the middle of the night with the television on to C-span. Some economist were discussing free trade and one happened to mention factor-price equalization. I fumbled around to find a pen to write it down so I would remember it in the morning. The next day I looked it up in an economic glossary.

Factor-Price Equalization
The fourth major theorem that arises out of the Heckscher-Ohlin model is called the factor-price equalization theorem. Simply stated the theorem says that when the prices of the output goods are equalized between countries as they move to free trade, then the prices of the factors (capital and labor) will also be equalized between countries.

Now I'm hearing that free trade economist pressure their colleges not to give any ammunition to free trade opponents. All this has done is confirm by suspicion that I can't trust economists to be honest.

If economist are afraid to bring up concepts that might tip the argument against free trade, I suggest they say nothing to the general public and go back to arguing with other economists in some obscure economic journal.

Economists believe that the more information you have the more rational your decision. Yet they hold back information they don't want the ignorant to know. So they are not interested in a rational conversation but one where they can best influence policy.

Ok, I didn't hear about factor/price equalization, big deal. Well what about our representatives in Congress. My guess is they never heard of it either. If some did know, they forgot to mention it.

My experience tells me that non-economists should trust their own gut instincts about free trade rather than trust what professional economists say.

When members of Congress lie to me I can always vote them out of office. When members of the economic profession conspire to hold back informantion, I can discount it's members advise.

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The web of losses that you describe in NC are offset by a web of gains in Boston. Restrict trade, and I pay more for my socks, do not eat dinner in Boston, and the web of losses you described in NC happens in Boston

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