I was having a conversation today with someone who, despite my best attempts, seemed to dismiss anything I said from an economist’s standpoint.

People seem to distrust economists more than most professions. It could be because economists, like any other social scientists, often get things wrong (I suggest Paul Krugman’s NYT piece here and Scott Sumner’s critique). Or maybe people see economists as engulfed in a world of “greed! greed! greed!” and “profits are all that matters!” and “efficiency over welfare!” and “markets work everywhere perfectly.” Or maybe some economists’ views are so different than people’s emotional justifications for their opinions that they just dismiss economic opinion all together. In reality, economists’ political views are much more evenly dispersed across the political spectrum than people think.

For things pertaining to wealth distribution, though any economist will acknowledge a degree of lost efficiency, much of the arguments for or against come down to subjective arguments that pertain to “social” costs and benefits and can’t be quantified in an economic study.

There are, however, a few things that economists almost unanimously agree on that are in drastic contrast to the general population’s views, things where there is wide agreement that the planned benefits from such legislation are clearly outweighed by the costs. These include ending rent control, abolishing agricultural subsidies (this might be in line with the general population but never happens politically), and abolishing any sort of government legislation that outlaws outsourcing.

But there’s one huge one. Free trade. That doesn’t mean “globalization”, the all-encompassing term used to describe anything that has happened in international relations in the last thirty years. It means removing tariffs, quotas, etc and allowing consulting individuals to trade goods they want at competitive prices.

The biggest issue, I think, with people failing to acknowledge the benefits of free trade is that they often only analyze what is right in front of them. If a car factory closes down in Detroit and the jobs to build those cars go to India, people think free trade made the U.S. lose thousands of jobs. But what is less tangible are the jobs created by the increased efficiency.

If anyone tells you they are opposed to free trade, ask them if they even understand the term comparative advantage. If they can’t, ask them why we would be better off all living like Robinson Crusoe’s and living in autarchy. That will probably at least bake their noodle.

Advertisements