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Trade’s winners and losers

April 5, 2016

One of the early and most important discoveries of economics is the theory of comparative advantage, explaining why two nations benefit from trade, even if one is richer and more efficient at everything it does. Importantly, that benefit is aggregate, for the nation, not necessarily for every individual or group within it. The movement of manufacturing abroad makes the US richer, but not some of those left jobless by that shift. Paul Krugman makes an interesting argument in a recent editorial. He points out that because liberals are more supportive of policies that cushion people from the harm of such shifts, they can provide more robust support for trade than do conservatives.

There are at least two reasons conservatives oppose social safety nets. On the one side is just the automatic opposition to any social program. But I suspect the more powerful reason is the social conservative message that the individual who cannot thrive by his own work is a moral failure. Even if the work they spent most of their life learning disappeared in the currents of the global economy. Does the internalization of that message explain who in Ignoreland supports Trump? And people who feel a sense of failure often look for others to blame. In the case of Trump supporters, they blame elites who they perceive as rigging the game against against working-class whites. Grievances are easily turned into political leverage. Comparative advantage? Well… that’s a hard message.

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