Mankiw on Free Trade

Greg Mankiw defends free trade against Robert Driskill’s attack. I’d add one more argument. Driskill claims that the benefits of free trade go to the few, the costs go to the many, and there’s no redistribution of the benefits to compensate them. Not only is there redistribution by way of the progressive tax system, as Mankiw notes, but the benefits of free trade extend much more widely than Driskill allows. Consider trade with Japan on electronics or automobiles. There’s no question that it cost many American jobs. But the benefits have extended to everyone who buys electronics or automobiles in the form of higher quality goods for lower prices.

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