Two Common Objections to Unilateral Free Trade

In spite of centuries of sound economic theory describing the benefits of free trade, we continue to hear two objections to free trade. We even sometimes hear these from friends who consider themselves generally to be in favor of free trade, even unilateral free trade.
The first objection I will call the Donald Trump objection – the claim that imports have cost Americans good paying jobs, from which the nation has never recovered and cannot recover as long as we allow imports to replace American made products. The second I will call the essential industries objection – the claim that there are some products that America must produce itself, no matter what the cost or inefficiency, in sufficient quantities to ensure access to these products in time of war.
Objection Number One: Free Trade Causes Unemployment
The first objection is easiest to dismiss, for it attempts to refute the “Law of Comparative Advantage,” postulated exactly two hundred years ago by the great English economist David Ricardo. Peaceful cooperation among peoples of the earth has no limit. Just as we Pennsylvanians find it advantageous to import pineapples from Hawaii rather than attempt to grow them, Americans find it advantageous to import many goods from people who just happen to live in foreign countries. Absent government intervention to restricts one’s own citizens from entering into peaceful cooperation to produce any legal product or service, all will find employment and all will be wealthier.

This post was published at Ludwig von Mises Institute on April 7, 2017.