ECONOMISTS love free trade. Their enthusiasm for it often seems to perplex outsiders. This may be due to the fact that "comparative advantage" isn't the most intuitive idea at first brush. Or it might also be a result of economists' frequent emphasis on a relatively narrow view of the gains from trade. The efficiency gains from specialisation are indeed important, but they merely account for a static rise in output. But trade also plays a role in growth: by expanding market size trade encourages the development of new goods, new ideas, and new ways of doing things. And there is also the tricky fact that lots of people live in very large countries, in which trade plays a relatively small economic role. Trade is a harder sell in America, for instance, than it may be in Ireland.Animus against trade rooted in that sort of logic rests, however, on a false distinction: that there is something qualitatively different about trade across borders and trade within borders. In some ways there is, of course. But in many of the ways that matter economically there isn't at all.
keyboard shortcuts: V vote up article J next comment K previous comment