My book Free Trade Doesn't Work was published five years ago by the U.S. Business and Industry Council, a Washington-based think tank and lobbying organization.
If the reader will forgive a bit of inside baseball, I'd like to review what I got right and what I got wrong, now that time has given a bit of perspective.
The good news is that the actual economics of the book seems to have stood up reasonably well. I must confess that when it came out, I was genuinely nervous that somebody would immediately write to me and reveal that I had gotten everything wrong because I hadn't thought of X. I had no idea what X might be, but I was still afraid that my opponents knew something that I didn't.
But that never happened. Or that's my opinion: if anyone insists that it did, please send me the link.
I did get any number of critical responses, but they all rehashed the usual mistaken economics of free trade. I had (again IMHO) refuted the conventional arguments for free trade in the book, so this didn't prove anything.
As a matter of fact, most of the attacks on my book didn't even try to refute what I'd actually written. This was a disappointment, but upon reflection, I realized it's actually par for the course in political controversy, and that every writer has to deal with it. People rarely read what you actually write, or respond to it. They skim you, pigeon-hole you, and then call you a genius or an idiot based on whether they agreed with you before they even sat down to read.
Now the above is actually the good news. Because the bad news is that the worst thing I learned from writing this book, is that almost nobody pays any attention at all to actual economics.
You'd think economics would be a popular discussion topic. After all, everyone cares about money, our political system is largely driven by economic factors, and there's this discipline "economics" that's taught in every university and that lots of obviously intelligent people claim to understand and believe in.
Unfortunately... most of that is fluff. It's not economics at all.
On the trade issue, there's an enormous amount of editorial chatter, but almost no actual economic analysis. Surprising, but true. People argue the political aspects, and throw around vague generalizations about globalization. They don't talk about actual quantities of production, consumption, and wealth.
To take just one example of the unseriousness of public debate on trade economics, it is flatly impossible to say anything serious on the subject without invoking David Ricardo's famous 1817 Theory of Comparative Advantage. It's like discussing physics without gravity. This particular point is a matter of 100% agreement between me and every single one of my opponents who has any economics education.
Comparative advantage is the very cornerstone of trade in a market economy and yet" 99.9% of public discussion of the issue doesn't even mention it. Let alone explain what it says. Let alone explain it correctly.
When I wrote my
book, I thought I would actually get somewhere by explaining in great detail
what this theory really says and why it's a useful intellectual construct but doesn't
actually prove free trade is the right policy, which people mistakenly think it
(If you're curious, the problems with the theory turn on the fact that it rests on hidden assumptions that don't hold true in the real world.)
But no. I got basically nowhere with this project of documenting the chapter-and-verse of why comparative advantage doesn't vindicate free trade. And not because I was wrong (IMHO), but because 99.9% of my opponents weren't even using the concept logically entailed by their own position in the first place.
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