Mankiw makes the case for trade

Mankiw points to an Robert Driskill, an economist at Vanderbilt, which calls into question economists support for free trade. Mankiw then lays out a few reasons why economists still support trade on brief philosophical grounds.

I will say that his point about progressive taxes and redistribution is pretty much the reason I feel like supporting normatively trade. There are losers to free trade, as well as winners. We talk about general social welfare functions sometimes, but at the individual or household level, when trade causes domestic prices to fall, those industries who produce in the now less profitable industry go through changes. Capital markets seem to move much more quickly than do labor markets, and capital and labor markets seem to highlight a lot of the income disparities in the country today. The wealthiest Americans own most of the capital, and are also usually in occupations that are harmed less by trade. The poorest Americans have the least education, the least wealth, and are in industries now being outdated by globalization (for instance, the automotives). We can see very plainly that the gains to the winners are more than the losses to the losers, and theoretically could transfer income gained to that lost, and would still end up ahead. But, that never happens, which is why it seems to me more ethical to support some kind of progressive income tax scheme combined with a larger social security system that aids the least well off in the society. Call it Rawls' "veil of ignorance," but I figure that's what'd I would want if I were to suddenly wake up poor and uneducated, at mimimum.