R: Free Trade Enslaves the World

Wednesday, October 7th, 2020 at 8:00 p.m. online

J. M. W. Turner, The Fighting Temeraire tugged to her last berth to be broken up, 1838, 1839, oil on canvas, 90.7 × 121.6 cm, National Gallery, London.

In 2016, a University of Chicago poll of 50 prominent economists found that 92% agreed or strongly agreed with the statement that "Freer movement of goods and services across borders within Europe has made the average western European citizen better off since the 1980s." This positive disposition towards free trade is similar to that of classical economists like Adam Smith and David Ricardo. Ricardo based his support for free trade on the idea of comparative advantage, which he describes as follows:

"Under a system of perfectly free commerce, each country naturally devotes its capital and labour to such employments as are most beneficial to each. This pursuit of individual advantage is admirably connected with the universal good of the whole. By stimulating industry, by regarding ingenuity, and by using most efficaciously the peculiar powers bestowed by nature, it distributes labour most effectively and most economically, while, by increasing the general mass of productions, it diffuses general benefit, and binds together by one common tie of interest and intercourse, the universal society of nations throughout the civilized world." (On the Principles of Political Economy and Taxation, Ch. 7: "On Foreign Trade")

According to Ricardo, free trade not only raises standards of living by promoting local specialization, but it also promotes international peace by bringing nations into mutual interdependence. Yet, this rosy view of free trade may seem to contradict what happens when countries actually open their borders to foreign trade. While formal slavery may not always be prevalent, laborers in developing countries often suffer unconscionable working conditions and dirt-cheap wages. In 2010, 14 workers committed suicide at Chinese factories belonging to Foxconn, an electronics manufacturer for multinational giants like Apple, Microsoft, Sony, and Intel. A report by Chinese academics later found widespread abuse and illegal overtime at Foxconn factories. Nor are complaints against free trade limited to the developing world. In America's Rust Belt, communities have become increasingly dependent upon welfare as their jobs get outsourced away. These despondent areas are also some of the hardest-hit by the opioid crisis, and they are often credited for winning Donald Trump the presidency in 2016. Is free trade oppressive? How should countries, both rich and poor, approach the question of trade policy? What responsibilities do consumers in wealthy countries have when deciding what to buy?