Evaluating the Controversy between Free Trade and Protectionism
This chapter argues for economic free trade through the lens of trade theory. While free trade may not be optimal, many consider it to be the most pragmatic policy option for a country. During the 19th and 20th centuries, policymakers asked whether free trade was in everyone's best interest. The modern case for free trade argues that government intervention in trade is impractical. Free trade is not always the best policy choice when the objective is to maximize national welfare. Free trade is pragmatically, rather than technically, optimal because it is attainable and most likely to produce the highest level of economic efficiency.
Evaluating the Controversy between Free Trade and Protectionism
Perhaps the most important policy issue of an international trade course is to answer the question "Should a country pursue free trade or some type of selected protection?" Academics, philosophers, policy analysts, and legislators have addressed this question for hundreds of years. And unfortunately, there is still no definitive answer.
The reason is that both free trade and selected protection have both positive and negative aspects. No one policy choice is clearly superior. Nonetheless, economists who have studied trade theory and policy tend to support free trade more so than just about any other contentious economic policy under public consideration. The reasons for this near consensus are complex and poorly understood by the general public. This chapter explains the economic case for free trade through the lens of trade theory and argues that even though free trade may not be "optimal," it is nonetheless the most pragmatic policy option a country can follow.
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