The benefits of free trade

Read Brad DeLong’s excellent post on how we should think about the benefits of free trade, and how large those benefits might be. The basic problem is that when you measure the costs of protection, they don’t seem so enormous in many standard models. So why are economists so solidly behind free trade? Most of all, I’ll opt for his number three, the “missing link” move:

The missing link move: assert that domestic technological and organizational progress is closely and tightly tied to the volume of trade, considered as a proxy for social and technical contact and for the extent to which the government takes down the umbrella protecting inefficient national champions from the rains of competition.


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