Wednesday, August 25, 2004

The Case Against Free Trade

Apart from cautioning against methodological purism, Gilpin has offered an explanation as to why free trade proves to be the exception and not the ideal in practise.

Krugman is probably right that the economics profession (if you can call them a profession any more than you would social workers) have failed dismally to educate not just the public but also the intelligentsia as to the insights of writers from David Hume onwards.

Gilpin adds to the intellectual pick and mix that is the debate on trade policy an element of Realist analysis, cautioning that the gains to trade can be measured two ways, as improvements in general welfare and as relative gains among the sovereign states jockeying for position globally. So, for example, although US consumers tangibly gained cheaper and better cars and consumer electronics from trading with Japan, the US responded to what was in political terms a challenge to its position as the free world's leader which took the form both of prestige, some measure of economic dominance in East Asia and soft power too.