If Free Trade = Technological Progress, Then Restrictions On Trade = Restrictions On Technology

From Greg Mankiw’s textbook:

“Trade is, in some ways, a form of technology. When a country exports wheat and imports textiles, it is as if it had invented a form of technology for turning wheat into textiles. A country that eliminates trade restrictions will, therefore, experience the same kind of economic growth that would occur after a major technological advance.”

With that understanding that free trade = technological progress, here’s some editing of Ian Fletcher’s latest anti-trade tirade, which Don Boudreaux responds to here:

“It is sometimes argued that although free trade technological progress has some victims, its benefits exceed its costs, so it is possible for its winners to compensate its losers out of their gains, everyone thereby coming out ahead in the end.

This is, in fact, the usual fallback position of mainstream economists once they admit that free trade technological progress has drawbacks.

It is sometimes even mischievously argued that if such compensation doesn’t happen, any problems are due to society’s failure to arrange it, and are therefore not the fault of free trade technological progress per se.

Hmm… Sounds like a perfect excuse.

Now in theory, they might be right, but it also means that a bureaucratic deus ex machina is required to make free trade technological progress work as even its supporters admit that it should.  So free trade technological progress turns out to be laissez faire on life support from big government.

In any case, such compensation rarely occurs, because free trade’s technological progress winners don’t have to pay off its losers.

It is often impossible to identify who has lost a job due to free trade technological progress as changing technology and consumer tastes also cost jobs (and legitimately so).

The time is past for free-trade technology band-aids. We need to stop treating the defects of free trade technological progress as mere imperfections to a fundamentally sound policy and realize that free trade technological progress itself is the problem, and should be ended with public policy that freezes technology at its current level (e.g., stopping all new inventions by closing down the U.S. Patent and Trademark Office).”

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