The Thinking 
Page 1 of 11

When Cheap Doohickeys Are the Ultimate End of International Trade

March 18, 2011



A number of the reader comments in the post on free trade struck me as clear-sighted. Take, for example, this one:

 “[T]he U.S. and other Western countries are importing goods from other countries that are cheaper than we can produce not because of any natural comparative advantage, but because those countries do not have the same laws and regulations regarding such things as environmental regulations, workplace health and safety, minimum wage laws and the like. To the extent that such laws and regulations are morally necessary (some but not all cases, in my opinion), we are getting cheap goods at the moral cost of patronizing companies, which treat their workers and environment in ways that we have deemed wrong and would not tolerate at home.” 

The “Free Trade” argument has always seemed to me grossly reductive. It says, in effect: “Look here, we can manufacture a doohickey for x dollars whereas the Laputans can manufacture it for 1/2x dollars; therefore let us stop manufacturing doohickeys so that we may buy them more cheaply from the Laputans.” Read More »

Page 1 of 11