Scott Sumner  

Nationalists are not utilitarians

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Nationalists are not utilitarians, and they often don't care very much about the poorest of the world's poor. Here's an example, from

In a new interview with the New York Daily News, Bernie Sanders said something striking -- he basically doesn't think the US should be trading very much at all with countries where wages are much lower than its own.

"You have to have standards," the senator said. "And what fair trade means to say that it is fair. It is roughly equivalent to the wages and environmental standards in the United States."

From Sanders's point of view, this makes sense. He has recognized, correctly, that freer trade with countries like China has hurt a subset of American workers (while benefiting others).

But there's one big problem, according to development economists I spoke to: Limiting trade with low-wage countries as severely as Sanders wants to would hurt the very poorest people on Earth. A lot.

Free trade is one of the best tools we have for fighting extreme poverty. If Sanders wins, and is serious about implementing his trade agenda as outlined in the NYDN interview and elsewhere, he will impoverish millions of already-poor people.

There are lots of problems with Sanders' views on economic policy, but this is by far the worst. Sanders is not a true socialist, he's a nationalist who doesn't seem too concerned about the global distribution of income.

I recently did some posts discussing research by Autor, Dorn, and Hanson, on the impact of trade on US labor markets. Although this research is sometimes interpreted as anti-free trade, the authors themselves seem to think otherwise:

The TPP's biggest provisions concern protection for intellectual property, liberalising trade in services and enforcing stricter labour and environmental standards. All this probably helps American workers. Mr Autor and two of his most frequent co-authors support the deal, arguing that the globalisation of manufacturing is a fait accompli. Blocking the TPP or other modern trade deals will not undo the failure to help those who lost out from trade with China.

To the extent that some Americans are harmed, which is inevitable, the projected gains of future free-trade agreements should be more than enough to compensate losers, if only the government can get itself organised. Peter Petri and Michael Plummer, two economists, estimate that the TPP will boost American incomes by $131 billion, or 0.5% of GDP. That is over 100 times what America spent on trade-adjustment assistance in 2009: there is plenty of scope to do more for the losers from trade.

In my view, the losers from international trade should be compensated in exactly the same way as the losers from other forms of creative destruction, such as technological progress. How did we compensate the small retailers that lost out to Walmart? It's also important to stop protecting high-income professions, such as medical doctors, from international competition. Blue-collar workers should not be the only group exposed to international competition.

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COMMENTS (16 to date)
Andrew_FL writes:

Given the binary choice between tribal ethics and utilitarianism, I'm casting a protest vote for a write in candidate.

Hans writes:

So the virtue of being a nationalist (not much these day's) are corrupted moral values!?

I am an American loving nationalist, but also a
practicing Christian whom is duty bound to helf
the less fortunate; with the latter being significantly more important.

As we should all know by now, Barry Sanders, is
economically illiterate with most of his free-lunch plans utter ruinous.

This is why I support (fair) trade equality with
other nations. It has lifted more people out of poverty (without governmental unit aid) in the past thirty years, than over the past two centuries.

BTW, Mr Sanders is getting most of his economic council from Mr Klugman and the editorial board of leading newspapers.

Zed writes:

So rather than an international socialist like Marx or Lenin, Mr Bernie Sanders is more of a national socialist?

Swami writes:

"To the extent that some Americans are harmed, which is inevitable, the projected gains of future free-trade agreements should be more than enough to compensate losers, if only the government can get itself organised."

I agree with your take on the tone of the paper. It is not an assault on free trade, it is a recognition of basically what Stolper/Samuelson made clear decades ago along with a new twist that the recent surge in globalism was historically unprecedented due to the nature of China's dramatic 180 degree shift in openness to globalism.

But note what the above sentence is doing to the word "should". It is being ambiguous in meaning, possibly intentionally so.

Does it mean free trade deals "assuredly" create more value than they destroy?

Or does it mean we should only approve trade deals which create more value within a nation than they destroy?

Or does it mean the government should have a responsibility to actively redistribute from the gainers to the losers?

I do suspect the sentence is being intentionally confusing, as they seem to be dancing around the first two, then they pivot toward the latter, absent any substantive argument on the pros and cons of doing so.

Like you, I think I could build a strong argument that programs to compensate "losers" can easily become iatrogenic and welfare reducing due to the effects of incentives and feedback loops.

Also odd, is that what they seem to imply is missing in government is organization.

Chuck writes:

Scott, you're doing this all wrong. Free trade isn't a charitable program to uplift poor foreigners. It's simply allowing Americans the choice to trade with foreigners if they want to.

There are plenty of Americans who will read this and say:

"Who cares about the Chinese. We should protect our fellow Americans."

If they really cared about their fellow Americans, they wouldn't threaten them with violence if they choose to buy their shoes from abroad.

Gordon writes:

"Sanders is not a true socialist, he's a nationalist who doesn't seem too concerned about the global distribution of income."

I've often wondered if socialists tend to have nationalist views because both the far left and far right tend to have incorrect zero sum views of economics. In Greece, Syriza is allied with a nationalist party. And after Syriza won its referendum last year, both socialist and nationalist politicians around the world offered their congratulations.

Scott Sumner writes:

Zed, I was thinking of making a joke along those lines, but no one has a sense of humor anymore.

Swami, Good point, there is ambiguity in that phrase.

Chuck, You said:

"plenty of Americans who will read this and say"

No, the readers of this blog are sophisticated enough to understand that I also think free trade benefits Americans.

Gordon, Yes, socialists are quite often nationalists. Of course non-socialists are as well, but nationalism doesn't conflict with conservative ideology as it does with socialist ideology. On the other hand, lots of conservatives are Christians, a religion that suggests the welfare of third world people is very important.

pgbh writes:

Isn't this evidence against your view that "leftist = utilitarian"? It's always seemed to me that leftists aren't utilitarian in many ways, this being a prominent example.

BC writes:

Bernie Sanders's views don't even make sense from a nationalist perspective. Even if someone favors their own family over strangers, who would say I will only shop at, i.e., trade with, grocery stores, car dealerships, shopping malls, etc. that pay wages at least as high was my wife's so that she doesn't have to compete against low-wage labor? No family is made better off by refusing to trade with other families.

Why do we talk about compensating the "losers" from free trade when protectionism is the actual intervention? The "gains" from trade are actually the losses that would have otherwise occurred from perpetuating protectionism. If there is any compensation that should occur, it should be the concentrated gainers from past protectionism compensating the dispersed losers (almost everybody) of protectionism.

BC writes:

@Hans, I don't know much about Barry Sanders's economic views, but he was a great running back who retired way too early.

Pajser writes:

It is hard to speak in the name of Sanders, but if he is a socialist, he thinks that free trade is not good method for helping domestic, relatively poor people or foreign, absolutely poor people. One can not know what Sanders intend to do for poor of the world on the base of his attitude toward free trade.

Generally, if one's ideology has any other goal beside internationalism, in some circumstances, that goal is in conflict with internationalism. It is not surprising that socialists, communists, anarchists, libertarians ... sometimes act like nationalists.

So rather than an international socialist like Marx or Lenin, Mr Bernie Sanders is more of a national socialist?

Well, he seems to be a believer in the international Jewish banking conspiracy.

MikeDC writes:

This is why science (economics) trumps morality (nationalism vs. utilitarianism). A good understanding of economics drives even nationalists toward free trade.

Calling oneself a socialist is to admit a poor understanding of economics.

jon writes:
  • he's a nationalist who doesn't seem too concerned about the global distribution of income
Does Scott, or any of the regular posters on this site, care about the income inequality in this country? If not, why the fake concern for income inequality around the world?
Scott Sumner writes:

pgbh, Actually I've claimed that liberals are utilitarians, not leftists.

Jon, I have advocated policies such as progressive consumption taxes, low wage subsidies, reform of intellectual property rights, zoning reform, occupational licensing reform, all of which would provide for greater equality.

Alexander Hamilton writes:

@Jon It's perfectly possible to care about actual poor people and not care about income inequality in one of the richest countries on earth. If you can't see why then I don't think I'll be able to convince you.

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