Monday, May 18, 2015

Excerpt from "Free Trade Under Fire"

Below is a short excerpt from the latest book I'm reading, Free Trade Under Fire, by Dartmouth economist Douglas Irwin. The highlighted portion is a quote of Paul Krugman, which states clearly his belief that free trade benefits the majority of stakeholders. It is often interest groups that benefit from protectionist arrangements like tariffs and quotas.

Of course it is possible that a stakeholder will lost out in regards to free trade between countries, just as it is possible that individuals can lose out when trading with each other. However, most people participate in trade because it is mutually beneficial. This is equally true of countries engaged in trade.

Interestingly, the free movement of labor would see far larger benefits than free trade, but is often restricted much more severely between countries.

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