Two years into the Trump administration, we’ve gained some insight into the place of trade within the president’s larger foreign and domestic policy agendas. Trump campaigned on the suffering of workers displaced by globalization, won the presidency in no small measure due to support from the Rust Belt, and has consistently enacted rhetoric—even if he doesn’t always implement the policy—aimed at protecting American jobs and industries from foreign competition. The administration’s posturing has upset relationships with traditional allies like Canada and the European Union, even while it has sharpened the lines of dispute with China and Mexico. The turmoil was on display perhaps most clearly in the wake of the recent G7 summit.
The economic case in favor of free trade remains as definitive and decisive today as it was when articulated by Adam Smith in 1776. “When two men trade between themselves it is undoubtedly for the advantage of both,” observes Smith, extending his observation even further: “The case is exactly the same betwixt any two nations.” David Ricardo’s later mathematical formulations of the mutual gains made possible by trade between nations in the context of comparative advantage are indisputably elegant and pair effectively with Smith’s prose prolixity. Ricardo did not live to see the repeal of the Corn Laws, a nineteenth-century form of British protectionism. But the subsequent two centuries of global economic growth evince the longer-term ascendance of the free trade perspectives of Smith and Ricardo.
The way many post-World War II policy discussions have taken shape seems to assume that the case for free trade is another of those self-evident truths enumerated in the Declaration of Independence. Amid the high spirits of free trade’s victory, intellectuals tended to forget the hard path to realizing a freer international economy and truly global trade. A few charts and invocation of magic phrases were assumed to be enough to ward off any lingering specters of protectionism. Dissenting voices were cast as retrograde or malcontents, cultured despisers of the material gains of what historian of economics Deirdre McCloskey has called “the Great Enrichment.”
It is a sad feature of human existence that cultural and intellectual achievements that take centuries to realize can be lost within a generation. “Liberty,” as Lord Acton put it, “is the delicate fruit of a mature civilization.” Part of the maturity necessary for realizing a liberal society, of which free trade is a cornerstone, is to defend it with sobriety. Doctrinaire advocates of free trade who turn it into ideology do no favors to their cause; by casting it as an absolute panacea, they sow the seeds of its demise. The concrete instantiation free trade takes in a particular context can never duplicate the perfection of its ideal form. Free trade remains a laudable aspiration, even as the concrete possibilities for freer exchange of goods and services across national borders seem to recede.
A sober defense of free trade aspires toward freer and freer exchange, even while it recognizes the necessities of incremental improvements and the messiness of politics. President Trump’s tirades against free trade are instructive here. At some level his pronouncements capture an element that free traders have tended to overlook: there are economic costs of globalization that are unequally borne by a subset of the national citizenry. So too are there cultural, social, and spiritual consequences, which range from great to galling.
Making an economic case for free trade is not enough. The moral and cultural case likewise needs to be made as well. To do so responsibly, the political and social dynamics of a competitive market economy need to be attended to. Protectionism, by artificially limiting the scope of striving and the field of competitive service, makes a people both economically weaker and spiritually fragile.
Friedrich Hayek saliently critiqued the flaws of ideology: “Probably nothing has done so much harm to the liberal cause as the wooden insistence of some liberals on certain rough rules of thumb, above all the principle of laissez-faire.” We might well add the ideological and economistic promotion of free trade as a corollary. The economic case for free trade can only be sufficient where economics is all that matters, or is at least the cardinal concern.
Trade may not be a zero-sum game, but politics all too often is. It is possible not only for individuals but also for firms and nations to trade with one another and both be made better off. But it is best left to these moral agents to judge when (and when not) to engage in trade. The framework of liberty provides just such a context, in which mutually-beneficial exchange becomes possible, albeit not guaranteed. Amid the alternative, when trade policy becomes a tool for merely political gain, we are all losers.
Dr. Jordan J. Ballor is a senior research fellow at the Acton Institute for the Study of Religion & Liberty and a postdoctoral researcher in the Moral Markets project at the Vrije Universiteit Amsterdam.
Photo Credit: President Donald Trump attends a tax reform for energy workers event at Andeavor Refinery on September 6, 2017, in Mandan, North Dakota. Official White House Photos by D. Myles Cullen.