By Mark Perry
Thomas Sowell once explained that economists visit the dentist so often because we gnash our teeth hearing so much “ignorant nonsense about the economy.” Thanks to the gibberish spewed almost daily about international trade, dentists must be having an especially busy year.
Virtually all economists support free trade and oppose protectionism. For example, a 2014 University of Chicago survey found that 93% of the country's top economists agreed with the statement “Past major trade deals have benefited most Americans” and none disagreed (7% were uncertain).
Despite that consensus, Sen. Bernie Sanders proudly proclaims that he has voted against every United States trade agreement starting with the North American Free Trade Agreement. Donald Trump tells us routinely that we're getting “ripped off,” “absolutely crushed” and “killed” on trade with China, Japan and Mexico — countries that are “laughing at us” as they are “beating us economically.”
We also hear from Trump that we're “going to lose $500 billion in terms of trade” to China, $58 billion to Mexico and more than $100 billion to Japan. Oh dear. Those figures aren't even correct. Our trade deficits last year were $366 billion with China, $58 billion with Mexico and $69 billion with Japan.
Let's start with two basic economic principles. First, countries don't engage in trade with each other — only businesses and consumers do. Second, when individuals engage in a voluntary market exchange, both parties — the buyer and the seller — are almost always made better off, because both parties get something they want. Trade is win-win, not win-lose as so many politicians these days would have us believe.
To understand how economically backward Trump's position is on trade, imagine him standing in the parking lot of a Walmart, Home Depot or Best Buy and shouting to Americans as they leave with their merchandise, “Hey, you just got absolutely crushed by those merchants who sold you cheap products made in China, Japan and Mexico. People overseas are now laughing at you.” That's ridiculous. Consumers who voluntarily purchased those products, and who probably said “thank you” to the cashier as they left, did so because they valued the merchandise they selected more than the dollars they left behind.
Read the rest here.