Free Trade is a Benevolent Force Whose Discontents Can Be Managed
Donald Trump’s economic populism and nationalism helped propel him to an unlikely victory on November 8. But like most populist appeals, Trump’s attacks on economic cornerstones such as free trade fall well short of facts and reality and offered few — if any — actual solutions to globalization’s discontents. Democrats have increasingly become the party of free trade; however, as the party begins its trek through the wilderness, resurgent leftist populism risks following Trump down the path of ignorance.
Free trade is, by all accounts, a benevolent force. I write this on a Macbook (not domestically produced), glancing occasionally at my Samsung phone (imported), wearing clothes made abroad, and sitting in a non-American chair. Thanks to trade, I can afford all of these items. Returning production to America would price me out of these consumer goods on which I rely to do my job. Anyone railing against free trade and speaking solely of its evils is a hypocrite if they do so from a machine not made in America.
Utilitarianism also demands that we embrace free trade. If policy seeks the greatest good for the greatest number, then we should strive for free trade when and wherever possible. Yes, there are downsides to free trade and it is their concentration that helped elect a demagogic president, but the dispersed cost-saving benefits far outweigh income losses. There’s irony in watching individuals on the one hand decry the influence of special interests in politics while on the other demanding national policy be changed to hurt the nation and benefit those upset about special interests. They forget that they themselves are a special interest group with outsized electoral sway.
Anger at a changing economy no longer understood by many pushed Rust Belt voters into the hands of Trump, whose grand promises of resurgent manufacturing are but the fantastic tales of an old man reminiscing of how things used to be. Today, the microchip is the primary culprit in a low-labor intensive manufacturing sector. All the tariffs in the world and renunciations of free trade agreements will not rollback machinery. Trump’s plans offer false promises that will likely plunge the country into recession without ever having a realistic chance of returning to our shores factories that moved abroad.
Those disaffected by trade need real help, not fables. Democrats need to give them solutions. A very simple and yet quite effective policy is job retraining. Empowering local nonprofits to assist displaced workers in acquiring the skills sought by new producers results in higher employment and higher wages. Workers are also decreasingly mobile. This creates problems as economic theory dictates that when jobs leave one region, workers will move to areas experiencing economic growth. Part of the setback stems from the high cost of living in booming areas — few low-skilled workers can afford to move to San Francisco. Encouraging housing growth in those areas will drive down rent. Similarly, investments in public transport such as commuter rails will decrease commute time and allow individuals to live far from expensive cities while still being able to work where the economy is hot. A simple trade displacement voucher would allow workers to choose job retraining or mobility.
Trade’s discontents are not a death knell. They’re an opportunity to help transition the economy into the 21st Century. Democrats would do well to embrace the competition and innovation spurred by free trade. Cowering in electoral fear and chasing Trump down the rabbit’s hole of ignorance hurts workers and the country as whole. The party ought to embrace globalization and deliver a strong message of how to deal with its repercussions. To do otherwise would be to follow Trump’s playbook: Lie to Americans with impunity.