Monday, August 1, 2016

In the long run, we are still not all free traders

Few people in politics are speaking up for trade agreements lately.  Hillary Clinton and Tim Kaine have switched from support to opposition on the Trans-Pacific Partnership.  Donald Trump has always been opposed to the TPP, and says he would even scrap NAFTA.  Greg Mankiw has a piece in the NY Times proposing that public support for free trade will increase over the long run as average levels of education increase.  His rationale (drawing on research by Edward Mansfield and Diana Mutz), is that more educated people are more internationalist and less ethnocentric, and therefore more likely to support free trade.  I think this is true, and there's also another reason that he doesn't mention:  more educated people are more favorable to markets generally (I've discussed that in several blog posts and this article).

However, Mankiw overlooks an important point, which is that support for trade agreements is not all that strong even among people with high levels of education.  For example, in a 2009 question about whether trade agreements like NAFTA and the policies of the World Trade Organization have been good or bad for the United States,  net favorability (good minus bad) was +24,+9,+5, and +11 among people with no high school diploma, high school diploma, some college, and college graduate respectively.*  Among people with a college degree (or more), 44% said "good thing," 33% "bad thing," and 22% that they didn't know.

Why is there substantial opposition to trade agreements, even among educated people?  I think that it's because many people see economics in moral terms--they regard making tangible things, especially things that are important for life, as more valuable than other activities.  So economists can talk about comparative advantage all they want, but for many people the loss of manufacturing jobs matters more than any gains in services and finance.  It's possible that this is just a historical legacy--people are thinking of the kind of jobs their fathers or grandfathers had as the standard--but my guess is that it goes deeper. 

*That looks like no relationship at all, but if you control for race and ethnicity, there is some association.

No comments:

Post a Comment