Monday, March 21, 2016

A Note to Donald Trump: Will Policy That Views International Trade a Struggle Between Nations Lead to War?

In 1995, Paul Krugman warned that was a possibility.

From page 84 of  Krugman’s 1995 article “The Illusion of Conflict in International Trade,” as it is reprinted in Krugman’s 1996 collection, Pop Internationalism:
I believe that if the rhetoric that portrays international trade as a struggle continues to dominate the discourse, then policy debate will in the end be dominated by men like [James] Goldsmith, who are willing to take that rhetoric to its logical conclusion.  That is, trade will be treated as war, and the current system of relatively open world markets will disintegrate because nobody but a few professors believes in the ideology of free trade.
And that will be a shame, because for all their faults the professors are right.  The conflict among nations that so many policy intellectuals imagines prevails is an illusion; but it is an illusion that can destroy the reality of mutual gains from trade.

(via Cafe Hayek)

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