Tag Archives: Free Trade

Echoing some of the arguments discussed here in the blog (for a list of posts on free trade go here, and for the effect of free trade on the Trump election here, here and here) Robert Wade suggests that the economics profession defense of "Free Trade" might have something to do with the election of Trump. Wade's phrase is perfect (apparently Adrian Wood came up with it): "Like Gresham’s Law, 'alternative facts' drive out facts." The alternative fact here is the theory of comparative...

The announcement, and backtracking, on a 20% tax on Mexican imports caused a lot of confusion yesterday. I assumed like most that this was a proposal for a tariff, which would both ditch NAFTA rules and run afoul of the WTO rules. The wall and the tariff led to a cancellation of the Mexican president's trip, and a souring of the diplomatic relations. But in all fairness, it seems that this had little to do with Mexico.The Republican Tax Plan basically is to eliminate the corporate income...

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The working class elephant in the room Upton Sinclair famously said that "it is difficult to get a man to understand something, when his salary depends on his not understanding it." Not understanding the results of this election is what the Democratic establishment is trying very hard to do. Many will continues to say that at the heart of the loss are the misogyny, racism and xenophobia of Trump and his supporters, which is real and problematic, but deny the truth that it was the...

So, besides the nativist, xenophobic, and racist appeals to the darker side of American society, Trump speech was all about trade, and its effects on the working class. That is clearly the strategy for November, and Hillary is, for obvious reasons, weak on that subject. I don't think Trump even thinks Bernie supporters would vote for him, but his appeal to them last night was for them not to vote for Hillary.Trade matters, even if Trump has no clue why. As, I have explained several times...

Well, partially, anyway.Just look at Pat Buchanan and Sean Hannity on – WTF?? – Fox News partially steal the Left’s agenda on economics, as they talk about the poisonous disaster of free trade, outsourcing, loss of manufacturing, the decline of the middle class, and mass unemployment in America. Just listen to Pat Buchanan praise Bernie and Ralph Nader at the end![embedded content]The world has turned upside down. This is why we need a reformed left, friends.I’m on Twitter: Lord Keynes...

Here is one called John Wright in 1785:“The minister cannot be ignorant that an alleviation of duties on India muslins and callicos, or giving encouragement to them by laying a heavier tax upon the cotton goods of this country, especially upon the infant manufacture of muslins and fine callicos, must depress and discourage the industry and ingenuity of our manufacturers at home, and have the strongest tendency to promote the sale of such foreign fabrics, in preference to those of Britain;...

I include the odd useful and relevant neoclassical work too. I will update on a regular basis:Baiman, R. 2010. “The Infeasibility of Free Trade in Classical Theory: Ricardo’s Comparative Advantage Parable has No Solution,” Review of Political Economy 22.3: 419–437.Bairoch, Paul. 1993. Economics and World History: Myths and Paradoxes. Harvester Wheatsheaf, New York and London.Brewer, A. 1985. “Trade with Fixed Real Wages and Mobile Capital,” Journal of International Economics 18:...

The argument for unrestricted free trade by Ricardo’s principle of comparative advantage requires a number of stated or hidden fundamental assumptions to work properly, as follows:(1) domestic capital or factors of production like capital goods and skilled labour are not internationally mobile, and instead will be re-employed in the sector/sectors in which the country’s comparative advantage lies;(2) workers are fungible, and will be re-trained easily and moved to the new sectors where...

Last weekend, as a result of Brad DeLong's post on free trade, we had a brief Twitter exchange. He had suggested that the Heckscher-Ohlin (HO) model* implies gains from trade associated to comparative advantage. He went further and suggested, after I implied that the Methuen Treaty between England and Portugal had not been favorable to the latter, that Portugal had indeed benefited greatly from free trade.It is important to note, before we get to Portugal, that the HO model, which is a...