A quickie - thoughts on DeLong's article in Vox

This is just a quickie (both in thought process and writing, so forgive the brain dump), I'm entirely too busy with work/school/family right now and so this is going to be neglected a lot more than I would like. But I did see this article that I wanted to share - it is from Brad DeLong on Vox about trade and it's a pretty good piece.

The comments I hear following the election is that the common wisdom regarding trade is wrong; that trade isn't the boon that everybody has always that it is. In 2016, nobody wanted to come out and defend free trade. Instead, we had both parties pledging a reduction in trade deals, and even potentially increasing trade barriers. In the linked article, DeLong pushes back against trade's critics. From the article, trade has not been the main cause of manufacturing job loss. Technology has displaced more workers than trade, and it isn't even close.

Noah Smith has recently attacked a lot of "foundational economic principles" as not really working in the real world. Among those, Smith has criticized trade, saying that it may actually produce a net negative benefit. I have a lot of difficulty believing that. The argument Smith provides is that trade is reducing income and personal/social well-being in exchange for cheaper stuff. The value of the cheaper stuff, according to Smith, is not enough to offset the reduction in jobs and reduced social status for displaced workers.

Isn't this just the opposite of the diffuse cost, concentrated benefit argument? In this case, we have diffuse benefit and concentrated cost. Everybody gets cheaper (and generally higher quality/dollar spent) goods, but some people get a really awful outcome, even with cheaper goods, because their previously well-paid skills are no longer valuable. Isn't that still an overall better outcome than before? It sounds awful, but wouldn't we want to generally raise everybody's standard of living a little, even if a small minority's standard of living is reduced by a lot? Another issue with this argument against free trade is that even if we don't allow companies to offshore labor or import foreign goods, those jobs are going away regardless. The reason is simple - people are expensive and inefficient. So now, not only are we not going to get cheaper, better goods, but people are going to lose their jobs anyway. The problem that free trade has created is a workforce training problem - we turned skilled labor to unskilled labor. The solution, then, to free trade is that it requires a system to mitigate the negative labor externalities.