Monday, December 13, 2010

A Shanghai-ed Column on Free Trade

Donald Boudreaux posts (12 December) on the ever entertaining and educational Blog, Café Hayek (where “Orders Emerge”) HERE

I strongly recommend that you (especially if you are a student or recent graduate – or even if you are senior economist) bookmark Café Hayek and dip into it regularly.

Don Boudreaux specialises in short, snappy and, oh! so brilliant, ‘letters’ to US papers and tv news channels that are bitingly witty and to the point on pronouncements on the eternal (so it seems) nonsense spouted on public policy, especially on tariffs and trade, which preach the same nonsense that was spouted in Adam Smith’s day by mercantile-minded lobbyists in and around parliament. (An example of how Don Boudreaux would never compose a sentence for publication.)

Contrary to popular credulity, these tariff mongers never went away in the 19th century and are still with us since GATT and WTO slipped into the headlines, wrongly implying that the free-trade campaign could sit back and exclaim “job-done”.

Here is Don’s latest blast at the still-with-us past:

“My buddy Bruce McLane alerted me to Maureen Callahan’s article in today’s New York Post – in response to which I sent this letter:

The arguments that Maureen Callahan lobs as grenades against technological change and trade are duds (“Not made in the USA,” Dec. 12). The reason is that each of these arguments would have been equally applicable to 19th-century America, with the only difference being that the fear back then would have been the decline of agricultural employment rather than of manufacturing and low-skill service-sector employment.

In 1820, 79 percent of Americans worked in agriculture. This number, however, was progressively reduced by improvements in technology. Chemical fertilizers and pesticides; mechanized planting and harvesting equipment; refrigeration; improved veterinary medicine; better irrigation; faster transportation; and improved packaging for produce – along with more food imports made possible, in part, by motorized sea and air travel – all “destroyed” millions of agricultural jobs.

Would the proper policy in the 19th century have been to stymie these changes because many workers who knew nothing but farming lost their agricultural jobs? If you agree that the answer is “no,” then it’s senseless to draw policy conclusions from Ms. Callahan’s lament for “the 45-year-old toll taker replaced by the E-ZPass” and “the 50-something cashier replaced by a self-service scanner.” These jobs, and the others whose demise Ms. Callahan mourns, were themselves made possible only because technology and trade had earlier eliminated the need to have so many people toil on farms and ranches.

Contrary to Ms. Callahan’s claim, the trend of technology and trade changing the contours and contents of economic opportunity did not begin 30 years ago: it began in earnest in the 18th century. And contrary to M[s]. Callahan’s suggestion, this trend is utterly essential to continued economic prosperity.

Donald J. Boudreaux”

Surely a delightful response, that is both polite and educational?

Bookmark Café Hayek now HERE and enjoy!

[Apologies to Don if I have invaded his copyright …]

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