The Great Trade Debate Continues

A few readers of this blog may remember a debate in March of last year between your humble correspondent and self-avowed protectionist Ian Fletcher of the US Business and Industry Council on the merits and morality of free trade versus protectionism.  (See here, here and here.)  Taking off of the US Chamber of Commerce's recent Top 10 Reasons Trade is Good for America (and Dan Ikenson's great additions thereto), Mr. Fletcher has written a detailed response, Ten Problems with Free Trade, which attempts to undermine some of the economic justifications of free trade (and, as usual, totally avoids the obvious immorality of his alternative to free exchange between individuals - coerced redistribution of wealth from consumers to producers through protective tariffs).

Mr. Fletcher's latest work has elicited quick responses from two of my favorite economist bloggers, Carpe Diem's Mark Perry and Cafe Hayek's Don Boudreaux.  Perry begins:

Well, let me start the debate by doing some editing of the Fletcher article (starting with a new title "Ten Problems With Free Trade Among American States"), my additions appear in bold below to illustrate my position as follows: The same arguments against free trade among nations should logically follow as arguments against free trade among American states, counties, cities, or individuals. That is, there is nothing really special or unique about an imaginary line called a national border that makes it economically different than an artificial line called a state border. The economic benefits of free trade have nothing to do with whether a buyer and seller are on the same side, or different sides, of imaginary lines called national, state or county borders.

Bottom Line: To argue against free trade among countries, one would also have to object to free trade among American states, counties, cities and individuals, see my edits below of Fletcher's article that hopefully make this point.

Check out the rest of Perry's post - and some very helpful additions in the comments section (no, not mine) - to see the obvious problems with Fletcher's protectionist positions when applied to interstate trade.  Hopefully Perry will take on some of Fletcher's responses (also in the comments) soon.

Boudreaux follows with a simple lesson on the inherent value of free exchange (and the absurdity of preventing that exchange) in the form of an open letter to Mr. Fletcher:

You tirelessly export – from your brain to the rest of us – the notion that economists and the general public should be much more skeptical of free trade. Your blog post “Ten Problems With Free Trade” is a good example of your argument.

Not only is your argument produced outside of the Boudreaux household – and not only do you, its producer, make it available to my son and myself free of charge (hence, at a price below your cost of production) – you also make it available free of charge to all of the many readers whose time and attention I compete for with my own blog, Cafe Hayek. Competition from you – a non-Boudreauxian – unfairly threatens my market share in the blogosphere!

So I shall adopt your recommendation and, from here on in, stop importing your output – for it is output that is foreign to my household and that undermines my ability to peddle my intellectual wares to potential readers. My importing your writings is, as the logic of your own argument attests, quite likely harmful to myself, to my son, and to our economic future. Caring to protect my and my son’s sovereignty and prosperity, I hereby impose an impenetrable barrier around my household to repel any imports that you send our way.

Great stuff (although I guess I really shouldn't be importing these ideas onto this blog!).  And once again, I invite you to read through the enlightening comments section under Boudreaux's post.  There's some very good stuff in there, including a humorous point-by-point refutation of Fletcher's original article.

Speaking of that article, I'm once again struck by the error of Fletcher's primary assumption: that for some reason it is free traders who must prove the economic soundness of voluntary, mutually beneficial exchange between individuals in different countries.  This position again appears to be the crux of Fletcher's argument, as he spends all of his time (in his article at least) "debunking" free trade economics, as if protectionism is the automatic and obvious "default" to which we must revert if he and his fellow protectionists poke enough holes in the economic case for free trade.  This, of course, is statist nonsense, as I pointed out in a simple example during my exchange with Mr. Fletcher last year:

If the government can, as you advocate below, use protectionism (authorized by Art. I, Sec. 8) to forcibly transfer, to any extent it sees fit, the private property (i.e., money) of goods consumers to goods producers, unless (and only unless) someone proves such wealth redistribution to be uneconomical, government also can impose a 100% income tax (Art. 1, Sec. 8; and the 16th Amdt) on a certain class of people, unless proven to be uneconomical. The government need not justify the morality and economics of such taxation - such forcible theft of a man's rightful earnings. Instead, the target of that taxation must prove why the government cannot confiscate all of his income, arguing not the morality of the government's position, but only its lack of economic soundness.

In short: I don't have to prove anything because I'm not the one advocating wealth redistribution at gunpoint (and you do, because you are).  Look, as I've noted here many times (and as guys like Perry and Boudreaux deftly show on an almost-daily basis) there are plenty of great economic and historical arguments in support of free exchange among individuals, but when you get down to it, they're kinda beside the point.  Until protectionists can prove - and I mean causation, not spurious correlation - that the American people will be made better off by the forcible government transfer of wealth from consumers to producers (i.e., protectionism), their attempts to "debunk" free traders' economics are nothing more than pointless obfuscation.  They, and they alone, bear the burden of justifying their calls for government interference, coercion and cronyism, and until protectionists like Mr. Fletcher meet that burden - something I seriously doubt they'll ever be able to do - all the great economic and historical support for free trade is just gravy.  Pretty great gravy, but gravy nonetheless.

Then again, given how daunting (impossible?) it must be to prove the economic value of protectionism, is it any wonder why protectionists like Mr. Fletcher spend most (all?) of their time sowing doubt about free trade economics rather than justifying their own immoral, statist positions?   Something to ponder.

UPDATE: Right after I hit "publish" on this post, I see that Perry has added more here.

UPDATE2: Boudreaux pens a second open letter here, and boy is it a doozie.