Prof. Angus Deaton
Princeton University
Prof. Deaton:
Over the years I’ve learned much from your writings, and I regard your 2013 The Great Escape as one of the most important books published in the past 15 years. So I was quite surprised and disappointed to read that you, as you say, are now “much more skeptical of the benefits of free trade” (“Rethinking My Economics,” March 2024). You attribute your change of heart and mind to what you allege is the harm done to American workers by freer trade.
Are you aware that the maximum estimate of the number of jobs America lost due to the so-called “China shock” – a shock that you elsewhere highlight as a regrettable consequence of U.S. trade policy – is only a tiny fraction of the number of jobs that are regularly destroyed in America as a result of our dynamic market economy? The vast majority of jobs destroyed during non-recessionary times are destroyed by innovation and changing consumer tastes and preferences. CEO Smith implements a new management technique that allows her to produce with 90 workers what formerly required 100 workers. Entrepreneur Jones builds a better mousetrap that eliminates the jobs of a few hundred exterminators. American women choose to have fewer children, wiping out several thousand jobs in diaper factories, child-care centers, and pediatricians’ offices. Americans improve their diets and thus cause job reductions in fast-food restaurants and donut shops. Large numbers of Californians, New Jerseyans, and New Yorkers move to Florida, South Carolina, and Texas, thus destroying jobs in their former home states. Such job churn is healthy and incessant, and is responsible in the U.S. for vastly more job losses than are imports.
Given this reality, do you – in light of your new-found wish to obstruct Americans’ purchases of imports in order to prevent some Americans from losing their current jobs – also support punitive taxation of innovation that might destroy jobs? Do you favor government policing of changes in consumer tastes? Is it now your view that government should override individuals’ freedom to choose how many, if any, children to have? Do you now insist that Americans ought to be prevented from moving to other states, or even to other locales within states?
If your answer to each of the questions in the previous paragraph is ‘no,’ how can you justify your support for government-imposed punitive sanctions on Americans’ freedom to spend their incomes on goods and services that are offered for sale by foreigners? Please tell me: how do jobs lost to imports differ from (what happen to be the far larger number of) jobs lost to innovation and to changes in demographics and consumer tastes?
Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030
