Anti-Foreign Bias

Tyler in the NYT Sunday:

The last 20 years have brought the world more trade, more globalization and more economic growth than in any previous such period in history. … Despite all these gains, the prevailing intellectual tendency these days is to apologize for free trade. A common claim is that trade liberalization should proceed only if it is accompanied by new policies to retrain displaced workers or otherwise ameliorate the consequences of economic volatility. …

What’s really happening is that many people, whether in the United States or abroad, are unduly suspicious about economic relations with foreigners. These complaints stem from basic human nature – namely, our tendency to divide people into "in groups" and "out groups" and to elevate one and to demonize the other. Americans fear that foreigners will rise at their expense or "control" some aspects of the economy.

Only on his blog does Tyler make his best point:

Virtually all of the "second best worrying" about trade could be applied also — in fact more so — to technical progress.  Or to trade across the fifty states.  Yet when it comes to foreigners, the worries acquire a more dangerous credibility.  That is the real second best problem, not any theorem you might derive about trade and externalities.

Nothing new here, but its worth a reminder from time to time. 

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