Lesson 5F

by Steven Suranovic ©1997-2006

Trade 5-5F 





Although protection can be beneficial, the case for free trade remains strong.

The argument in support of free trade is often different depending on whether the speaker is in a political setting or an academic setting. In a political setting, political realities will often force the speaker to emphasize all of the positive aspects of free trade and to hardly even mention any negative aspects. The reason for this is thattalking of the negative effects of free trade will offer up ammunition to one's opponents who may then use these statements against him in future debates.

Since most people will have learned the argument for free trade by listening to political and public policy debates in the news media, they are likely to believe that economics teaches that free trade is good for all people, in all countries, at all times. This belief may lead people, especially those obviously hurt by freer trade policies, to doubt whether economics has anything useful to say about the real world.

However, the academic argument for free trade, is much more sophisticated than the typical political argument. As readers of this site will learn, free trade will cause harm to some (see 5-5b), as well as good to others. Furthermore, certain selected protectionist policies can be good for individuals, and for the nation (see 5-5e), but they will also cause harm as well.

Thus, the choice between free trade and selected protection is not as simple as typically presented by political advocates on one side or the other. In essence, one must choose between the good and bad that comes with free trade, and the good and bad that comes with selected protectionism. In weighing the alternatives, economists often conclude that free trade is the more pragmatic choice, dominating, for a variety of reasons, selected protectionist policies.

This more sophisticated argument for free trade is the topic of Chapter 120. The chapter highlights both the positive and negative aspects of free trade policies and refers readers back via hyperlinks to many sections in the main text to support each argument. Chapter 120 is useful to read at the beginning of your studies to see where the course is going. It is even more important to read at the end, to see how everything covered in the text fits into the argument supporting free trade. During this second reading, the hyperlinks will become especially useful.

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International Trade Theory and Policy Lecture Notes: ©1997-2006 Steven M. Suranovic Last Updated on 6/13/06