Trading values
Project Syndicate has an ongoing series by Columbia University economist Jagdish Bhagwati on “The Open Economy and its Enemies.” There is more or less a consensus among economists that free trade promotes economic growth; the law of comparative advantage still holds nearly two centuries after it was formulated. But the opinions of both the public and other social scientists are more ambivalent.
Competition is the means by which actors in an open economy are disciplined. But competition generates losers and winners, too –at least in the short run. Non-economic concerns with free trade include growing inequality, the constant displacement of people under conditions of ruthless competition, environmental degradation, the globe-spanning hazards of mutual dependency, and national security.
Critics of free trade may accuse economists of linear thinking for ignoring the messiness of reality. But economists might equally accuse critics of free trade for ignoring the bottom line –that increased wealth will expand the possibilities of what a society can accomplish.
The free trade debate, like many others, asks how willing we are to trade increased levels of wealth for other values, and under what conditions. Not surprisingly, this debate tends to come to the fore in times of economic uncertainty.
-Charles
Image by Flickr user free range jace used under a Creative Commons Attribution License
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