Argument: Free trade shifts work to more productive sectors

Issue Report: Free trade


  • James K. Glassman. “Trade Briefing Paper no. 1 The Blessings of Free Trade”. Center for Trade Policy Studies. May 1, 1998 – “‘Free trade does not create jobs,’ writes Melvyn Krauss of the Hoover Institution in How Nations Grow Rich, his excellent book on trade. Instead, ‘it creates income for the community by reallocating jobs and capital from lower-productivity to higher-productivity sectors of the economy.’ In other words, trade allows us to concentrate on what we do best. It may kill jobs in the textile industry, which is labor intensive, but breed jobs in electronics, where ingenious Americans have a “comparative advantage,’ in the famous phrase used by David Ricardo in 1817.”
  • Dwight R lee, “Free Trade to Benefit the Many–Not Fair Trade to Benefit the Few” “The advantage from trade with other countries does not come from selling more to them than they sell to us so we can create more jobs. The key to a successful economy has never been simply the creation of jobs. The ability to consume always exceeds the ability to produce, so there is never a lack of work to do. The key to a successful economy is directing people into the most productive jobs, those that create the most value for consumers. This is the real advantage of international trade. We create more productive domestic jobs both when we sell and when we buy from other countries, and the more open the international trade arrangements the better for all countries. When country B restricts the import of American products it reduces its productivity as well as ours. But we only add to our productivity loss if we respond by restricting the ability of our citizens to buy products from country B.”