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The Preference of Free Trade and Protectionism

© Bryan Johnson

To be sure, there are wide, cavernous differences amongst policymakers about the virtues of free trade, not just in the U.S., but globally. Most cannot even bring themselves to agree on a definition of what constitutes free trade. Among the thousands of policy issues, trade truly is an item where reasonable people can disagree. But most of the disagreement over trade can be generally explained by examining the differences in the preference held by free traders and those held by protectionist.

On the one hand, if you are one to support the concept that the national economic interest of a country is defined by the populous (that being individuals choosing how to dispose of their income as they see fit: what kind of clothes to wear, what kind of cars to drive, and what kind of food to feed their children) the necessity of business to import in order to boost competitiveness, and accept the trade off of jobs lost in favor of jobs produced, then you are probably predisposed to support free trade.

On the other hand, if you are one to support the notion that the national economic interest of the country is best defined by the state (that being the state determines the interests of consumers by restricting consumer choice in favor of the "greater good") the necessity of producing all necessary inputs domestically for domestic manufacturing, even if it raises cost, and accept that protecting existing jobs is more important than the creation of new ones, then you are probably predisposed to support protectionism.

While the above is a very general description of the different preferences forwarded by free traders and by protectionists, it illustrates that most of the current debate about trade is diversionary. There would be much less debate about trade if proponents and opponents were clear about what preferences they hold to be most important. Clearly, a person like Ross Perot, who believes that it is far more important to protect U.S. jobs then it is to let individual Americans decide how to best spend their own money, is not "wrong" when he says the U.S. should have a trade policy that restricts imports. Likewise, when President Bill Clinton, like the many Presidents before him, says he believes the greater good is served by maximizing consumer choice, competition in the marketplace, and American competitiveness, he is not "wrong" when he forwards policies to keep America's borders open to imports.

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