Free Trade Doesn't Work: What Should Replace It and Why

TLDR: Free Trade Doesn't Work: What Should Replace It and Why Ian Fletcher Coalition for a Prosperous America, 2011 edition as discussed by the authors is one of the very best books on the subject.

Abstract: Free Trade Doesn't Work: What Should Replace It and Why Ian Fletcher Coalition for a Prosperous America, 2011 editionThe old labels that squared "Free Trade" offagainst "Protectionism" hardly seem adequate in today's context, since old habits of thought about them will incline us toward a far too quick and simple prejudgment of an issue of great intricacy and importance. As everyone knows, developments in transportation and communication have in recent decades brought into existence the tornadic winds of global competition, exposing nations, firms and workers to rapid displacement by low-cost producers and workers from parts of the world that used to be effectively quite distant. To those who look only to "economic efficiency," this is praised as "creative destruction"; but those who focus on a desire of particular peoples or localities to retain or develop industries that will not be nullified by the distant competition will seek ways to prevent their being blown away. According to nineteenth-century economist David Ricardo's law of "comparative advantage," all economic actors are assured "something to do," but that something may be very different from the aspirations or the long-term capabilities of a given people.Ian Fletcher's Free Trade Doesn't Work is among the very best books on the subject. Although the candor of its title, which indicates a clear dissent from the prevailing faith in global markets, may turn many people away, the book is one that everyone, from whatever point of view, will profit from reading. (We say this on the premise that serious readers realize the intellectual insufficiency of reading only what they already believe.) While immensely informative about economic history, the book's main strength is in its straight-forward, in-depth discussion of the vitally important conceptual and policy issues that underlie the subject.It has become commonplace among those who see the flaws in the Ricardian analysis to praise the brilliance of Ralph Gomory and William Baumol's Global Trade and Conflicting National Interests (2000). Fletcher joins in this, his rationale being that "finally, someone has found a way to translate this eminently practical wisdom [of the anti-free trade position] into the abstruse mathematics economists are prepared to consider 'serious' economics." While we can see from this that the Gomory-Baumol contribution is indeed meaningful, it is a distinct advantage of the Fletcher book, so far as most readers will be concerned, that it eschews the "abstruse mathematics" and confines itself to a serious, albeit eminently readable, discussion in ordinary language.Educated at Columbia and the University of Chicago, Fletcher was a research fellow at the United States Business & Industry Council before becoming senior economist at the Coalition for a Prosperous America. The book's first edition, in 2010, was published by the Council, and the revised second edition by the Coalition.As one would expect, there is considerable information in Free Trade Doesn't Work about the United States' slipping economic condition, which has been marked by a hollowing-out of American industry that began as long ago as the 1960s. He talks about the loss of what was once a pronounced lead in high technology; about the shiftto financialization; about the loss of U.S. jobs, including those in engineering and architecture; and about the deindustrialization. When he asks "why are we doing this to ourselves?," he says that there is some free-trade fanaticism, but that the main factor is simply the near-universal naive belief that economists must be right in their adherence to the Ricardian faith. This is augmented, he says, by U.S. businesses' hewing closely to their individual interests, by the political clout of defense contractors, and by such venalities as that "fully half the American trade diplomats who leftgovernment service went to work for foreign nations." President Obama, he recounts, has played both sides of the free trade/protectionist issue according to what has been politically advantageous from time to time, but since his election has mainly acted according to free trade orthodoxy (such as by not renegotiating NAFTA as he had once stoutly affirmed that he would in a primary election-season debate with Hillary Clinton). …