The Deplorable Victims of Free Trade

Suppose you run a workshop near the border. A competitor opens up across the street employing sweated labour. Foul! You cry. Now put this competing workshop just across the national border. Exactly why has the unfair competition become fair?

President George H.W. Bush signed the North American Free Trade Agreement (NAFTA) in 1992. Did he take account of the probability that US manufacturing plants would move to Mexico? Did he consider the economic and social effects that this would have on many thousands of US manufacturing workers, their families and their communities? I doubt it. Elite indifference to the plight of ordinary (“deplorable”) people is precisely the reason why Donald Trump’s populism resonates.

Free trade is totemic for economic rationalists. It is unsurprising that they object to what they consider to be President Trump’s protectionist tendencies. The virtue of free trade is unarguable to its disciples. To them, those who have doubts clearly lack a proper understanding of the benefits it brings. The wellspring of our very progress and future prosperity is brought into question. To be clear, they have a point. No one should doubt the essential role that specialisation and international trade have played, and will continue to play, in creating wealth. That cannot legitimately be brought into question. However, what can legitimately be brought into question is the proposition that each instance of freeing up trade always brings net benefits to all participating countries.