Home / World News / Opinion | Can Free Trade Work for Everyone?

Opinion | Can Free Trade Work for Everyone?

But when it comes to proposed solutions, Hubbard’s are bound to strike skeptics of free trade as lukewarm. They include block grants for community colleges, personal re-employment accounts to help displaced workers acquire marketable skills, wage insurance, an expanded earned-income tax credit, “place-based” aid that creates jobs where people live so they don’t have to move and changed tax subsidies for health insurance that make it easier for people to change jobs without losing coverage. He proposes a task force on economic engagement that would issue scorecards on bills and regulations based on whether they promote economic engagement. (Surprisingly for a Republican economist, he also suggests a “modest” increase in the corporate income tax and is open to getting rid of a provision in the estate tax that allows heirs to avoid taxation on capital gains made before their inheritance.)

These are worthy agenda items. The challenge that Hubbard and other free-traders face is the deep reservoir of skepticism that has accumulated since at least 1962, when President John F. Kennedy sold tariff reductions to Congress by including “trade adjustment assistance” — which was supposed to help people whose jobs were wiped out by imports. As Hubbard acknowledges, “Not a single TAA request was even approved until 1969!”

The “bridges” in Hubbard’s title connect people to opportunity, while the “walls” are intended to protect them from harm by blocking out the world. He sees bridges as good and walls as bad. Unfortunately, he overworks the metaphor. There are undoubtedly civil engineering textbooks that use the words less frequently.

For Hubbard, the trickiest challenge is differentiating his stance from that of those fellow conservatives who agree with him on many issues but not on free markets. One such is Oren Cass, whose name appears in the book 39 times. Cass is the executive director of American Compass, a think tank that “emphasizes the importance of family, community and industry.” He is a leader of the newly christened national conservatism movement, which rejects globalization in favor of nationalism.

Hubbard argues that in the name of workers’ dignity Cass is bent on preserving jobs, especially in manufacturing, that have become obsolete. He says Cass is trying to “restrict the evolution of work” while engaging in protectionism and picking winners and losers.

Cass has already issued a partial rebuttal in the form of an article in the journal American Affairs that appeared even before Hubbard’s book’s publication date. It’s slyly titled “Have I Got a Bridge to Sell You: The Limitations of Econ 101.” Cass writes that civilizations require walls as well as bridges. As for Hubbard’s argument that countries should specialize in what they’re best at, known as the theory of comparative advantage, Cass responds that “today’s debates concern how comparative advantage is created, rather than discovered.” That is correct and important. Japan and South Korea, to name two examples, did not become world leaders in electronics based on natural endowments. They created their advantages.

I say Cass’s rebuttal is partial because Cass never mentions that Hubbard singles him out for criticism in “The Wall and the Bridge.” And Cass doesn’t engage with all of Hubbard’s points. For one thing, while free traders can be faulted for the failure of their policies to protect the losers from trade, national conservatives such as Cass can be faulted for the repeated shortcomings of industrial policy. “Once government starts explicitly tilting the playing field of commerce,” Hubbard writes, “various businesses or trades will band together to use government as a tool to redistribute income to themselves at the expense of the public.”

About brandsauthority

Check Also

Teen rock-thrower 'hit pregnant Perth mum'

A pregnant woman is recovering from a heart attack after allegedly being hit in the …

%d bloggers like this: