Your style of argument against free trade reminds me of the knight on the bridge in Monty Python's Holy Grail movie. The discipline cuts off your arm, and you insist you're not hurt and you'll keep fighting. The discipline cuts off your other arm, and you say it's just a flueh wound. Trump smashes up the economy with numbskull tariffs, the stock market plunges because it makes America's economic future dimmer, and every decent economist can see perfectly clearly why this economic policy is destructive, but here you are flailing and somehow managing to miss the point.
You seem to think that standard free trade economics doesn't predict that the quality of the jobs under free trade will be better, only the living standard will be higher. But of course, people choose jobs based on job quality as well as earnings. When people have higher living standards, they're less willing to put up with miserable jobs. They demand better job amenities as well as nicer cars, niftier devices and more floor space. Employers competing for workers offer better job amenities along with everything else.
You seem to think it's evidence against the mainstream economics consensus in favor of free trade, that for many individual workers, the jobs they get under free trade aren't as good as those they would have had under protectionism. But economists always knew this perfectly well, and every mainstream economic textbook will emphasize that free trade has winners and losers. The traditional standard position is to advocate instituting free trade, and then compensating the losers, and trade adjustment assistance policies implement this advice.
I understand the need to lash out, since you've built a whole advocacy empire around not understanding basic international economics. Now Trump's idiot tariffs are providing a massive cautionary tale against your views, it does put you in an awkward position, doesn't it?
And there's also something admirable about the night on the bridge losing his limbs one by one, but none of his defiant courage. Admirable, but also pathetic.
Oren once again prefers debating with fellow elites and ignoring the authoritarian movement that continues apace. BTW, Gillian Tett, who Oren touted in his last piece, is on Ezra Klein’s podcast this week. Listening to her gives a much different take than Oren presented. Make sure to listen to the end, where she explains why Don terrifies her. Apparently Oren disagrees… Good luck America.
What do you think about Dani Rodrik? He's very much a mainstream economist--professor at Harvard, publishes in the right journals, tons of citations, etc--but he's long been skeptical of the standard optimistic stories economists tend to tell about free trade.
My guess--largely from reading his 2015 book on economic methodology-- is that he'd say the basic methods of the field are healthy, but when it comes to trade economists are often too quick to write and talk as if there's a single model that's clearly best for all contexts, as opposed to a whole array of models, some of which will make various protectionist policies look good, and where it takes art rather than science to decide which model is appropriate to which application.
Basically, I'm wondering whether you agree with the revolution in the mid 20th century that led to the quantitative model as the stock in trade of the economist, while thinking that they are just too cavalier about insisting on their favorite models of trade, (this is Rodrik's view as i understand it) or instead you think the field would be better as it was in the 19th century, when the idea that an aspiring economist would have to master real analysis would've seemed bizarre.
Great read, man. Economics is at it's very best when it is creating mental tools, conceptual frameworks, and systems of thinking and brilliant language for better discussing many-variable complex systems rooted in collective human behavior. When I think of great economic thinkers of my generation Tyler Cowen comes to mind, and Bryan Caplan. And let's not forget Anne Case and Angus Deaton--the authors of Deaths of Despair. By contrast Economics is at it's very worst when it's practitioners pretend that they are classical physicists and demand to be treated as such.
Every economist should be forced to step into a manufacturing facility in Mexico, survey the employees and economic conditions of the city. In fact, spend a season working with blue collar workers to obtain a different point of view outside their statistics.
My favorite professors were the economist that had a background in physical labor prior to obtaining their PhD.
I am sorry to say that I agree with the fundamental assertion of this article. Unfortunately it is not only the general public that believes in their superior wisdom, but the economists themselves. This leaves them vulnerable to the blind spots of the fads and tendencies of their profession. It also makes them sorely handicapped for interdisciplinary work. They are unable to understand questions framed in plain English or generally unwilling to respond to them. Part of this was raised by Hayek in his Nobel prize speech. It is so difficult to find an open mind economist that I had a wild hope when I saw the title of your post, only to be brought back to reality.
This is a well written and pithy passage: "And whether you want to admit it, dear reader, you still have tucked in the back of your mind an intuition, drummed into you by your schooling and the media, that “well, they’re economists, I’m sure they must know what they’re talking about.” My solemnly sworn duty is to free you from that misconception and to persuade you that indeed economists often have no idea what they are talking about, that the dysfunctional culture of their profession compounds this problem with their absurd assertions, and that their abuse of the trust you have placed in them has helped lead the nation to its present challenges." Hear, hear!
Yes, agree Oren. They are sociologists. Better description. This is what they used to be called not that long ago. But economist sounds more scientific which makes them appear more creditable. Of course you have to have science! Everybody has science now. If not appearing scientific you will not be creditable.
This piece again shows how academia shuns and looks down upon the trades. The trades people are below them. They have been conditioned in school to think this way. If you don't have a shirt and tie on you are slow and not very bright. Funny too here, as the principle so excellently points out that manufacturing today is in sterile or clean environments usually with robots and computers being used. Most of these so-called intelligentsia don't even realize what a modern manufacturing plant does or looks like.
The University = The "New Religion" the religion of nihilism
The discussion here seems to be about broad tariffs, which as the new commerce secretary Lutnick said will help the US make T-shirts, towels and sneakers domestically. That sounds like not a great plan. On the other hand, targeted industrial policy aimed at high value things like semiconductors (Biden’s CHIPS act) can create positive development such as the Arizona quality jobs and training programs cited by the author here.
So once again, Oren supplies some valuable and necessary corrections to common economic fallacies of the center left and therefore many people at large. Good, period, full stop. Unfortunately, he precedes it with plenty of the risible, tendentious sneering that other comments note, which have both the intent and effect of priming the revolutionary faithful to swallow whole whatever follows, not to mention blanket dismissal of opposing viewpoints as the productions of helpless morons, if not Marxist tools. Oren also ignores an important implication of his own analysis. He correctly points out that it took decades of disastrous free trade absolutism and consequent deindustrialization to bring us to our current state of dysfunction. What are the chances that pursuing a rapid, chaotic and global trade war, conducted personally according to the senseless intuitions of a transactional narcissist, and starting with meat ax attacks on our geopolitical friends and allies, is going to reverse in short order a deindustrialization process that took decades? What set of ceo’s and forward looking entrepreneurs is going to invest heavily, and soon, in onshoring supply chains under circumstances subject to the whims of an unstable and deteriorating King Lear? For a pundit who rightly insists on returning economics to the study of the real world in its full social and political context, it seems perverse to ignore the fact that the forest is on fire as he carefully explains how forest health for the long term can and should be adjusted.
Agree with you that I wish Oren’s approach was a bit lighter. Seems like no secret that he hates Justin Wolfers’s work (and maybe Wolfers personally).
I think you also hit nicely on a key tension in Oren’s work: he is advocating for an “intellectual project” (i.e., reversal of the impacts from a decades-long unfavorable trade / industrial policy) that requires deep intentionality and coordination (domestically and internationally) from our leaders, yet there is (seemingly) less than zero attempt by the current administration to provide the long-term strategic vision of why America needs to (understandably) course correct in certain areas and / or how our best trading partners can constructively fit into that long-term vision. Instead, it’s just whipsawing disorder and confusion for all. So, Oren is sort of left holding the bag defending the actions of an administration that is executing (super) suboptimally on the intellectual project. (This is not to say that even with perfect execution it would work, but if you’re going to attempt it, at least do it credibly so businesses can plan, etc.) I’m curious at what point he (maybe) “breaks” from his qualified defense of his team. My sense is that it will be when the TCJA gets extended, further eroding our fiscal health…
Actually, comparative advantage itself is the best and simplest refutation of Stevenson's now-deleted tweet. If we had a comparative disadvantage in something, that would imply it was relatively *more* expensive to manufacture here in the US, which would imply that costs -- of which wages are one part -- were *higher* here. So how could you say that reshoring would lower wages?
There are many good arguments against tariffs, but saying they would lower wages makes no sense at all.
Your style of argument against free trade reminds me of the knight on the bridge in Monty Python's Holy Grail movie. The discipline cuts off your arm, and you insist you're not hurt and you'll keep fighting. The discipline cuts off your other arm, and you say it's just a flueh wound. Trump smashes up the economy with numbskull tariffs, the stock market plunges because it makes America's economic future dimmer, and every decent economist can see perfectly clearly why this economic policy is destructive, but here you are flailing and somehow managing to miss the point.
You seem to think that standard free trade economics doesn't predict that the quality of the jobs under free trade will be better, only the living standard will be higher. But of course, people choose jobs based on job quality as well as earnings. When people have higher living standards, they're less willing to put up with miserable jobs. They demand better job amenities as well as nicer cars, niftier devices and more floor space. Employers competing for workers offer better job amenities along with everything else.
You seem to think it's evidence against the mainstream economics consensus in favor of free trade, that for many individual workers, the jobs they get under free trade aren't as good as those they would have had under protectionism. But economists always knew this perfectly well, and every mainstream economic textbook will emphasize that free trade has winners and losers. The traditional standard position is to advocate instituting free trade, and then compensating the losers, and trade adjustment assistance policies implement this advice.
I understand the need to lash out, since you've built a whole advocacy empire around not understanding basic international economics. Now Trump's idiot tariffs are providing a massive cautionary tale against your views, it does put you in an awkward position, doesn't it?
And there's also something admirable about the night on the bridge losing his limbs one by one, but none of his defiant courage. Admirable, but also pathetic.
Oren once again prefers debating with fellow elites and ignoring the authoritarian movement that continues apace. BTW, Gillian Tett, who Oren touted in his last piece, is on Ezra Klein’s podcast this week. Listening to her gives a much different take than Oren presented. Make sure to listen to the end, where she explains why Don terrifies her. Apparently Oren disagrees… Good luck America.
What do you think about Dani Rodrik? He's very much a mainstream economist--professor at Harvard, publishes in the right journals, tons of citations, etc--but he's long been skeptical of the standard optimistic stories economists tend to tell about free trade.
My guess--largely from reading his 2015 book on economic methodology-- is that he'd say the basic methods of the field are healthy, but when it comes to trade economists are often too quick to write and talk as if there's a single model that's clearly best for all contexts, as opposed to a whole array of models, some of which will make various protectionist policies look good, and where it takes art rather than science to decide which model is appropriate to which application.
Basically, I'm wondering whether you agree with the revolution in the mid 20th century that led to the quantitative model as the stock in trade of the economist, while thinking that they are just too cavalier about insisting on their favorite models of trade, (this is Rodrik's view as i understand it) or instead you think the field would be better as it was in the 19th century, when the idea that an aspiring economist would have to master real analysis would've seemed bizarre.
Great read, man. Economics is at it's very best when it is creating mental tools, conceptual frameworks, and systems of thinking and brilliant language for better discussing many-variable complex systems rooted in collective human behavior. When I think of great economic thinkers of my generation Tyler Cowen comes to mind, and Bryan Caplan. And let's not forget Anne Case and Angus Deaton--the authors of Deaths of Despair. By contrast Economics is at it's very worst when it's practitioners pretend that they are classical physicists and demand to be treated as such.
Every economist should be forced to read the final paragraphs of Stolper and Samuelson's "Protection and Real Wages." Not once, but once a year.
Every economist should be forced to step into a manufacturing facility in Mexico, survey the employees and economic conditions of the city. In fact, spend a season working with blue collar workers to obtain a different point of view outside their statistics.
My favorite professors were the economist that had a background in physical labor prior to obtaining their PhD.
Assume we have a can opener.
I am sorry to say that I agree with the fundamental assertion of this article. Unfortunately it is not only the general public that believes in their superior wisdom, but the economists themselves. This leaves them vulnerable to the blind spots of the fads and tendencies of their profession. It also makes them sorely handicapped for interdisciplinary work. They are unable to understand questions framed in plain English or generally unwilling to respond to them. Part of this was raised by Hayek in his Nobel prize speech. It is so difficult to find an open mind economist that I had a wild hope when I saw the title of your post, only to be brought back to reality.
Aren’t there more important issues to focus on at the moment???
This is a well written and pithy passage: "And whether you want to admit it, dear reader, you still have tucked in the back of your mind an intuition, drummed into you by your schooling and the media, that “well, they’re economists, I’m sure they must know what they’re talking about.” My solemnly sworn duty is to free you from that misconception and to persuade you that indeed economists often have no idea what they are talking about, that the dysfunctional culture of their profession compounds this problem with their absurd assertions, and that their abuse of the trust you have placed in them has helped lead the nation to its present challenges." Hear, hear!
Another outstanding column, Oren. Mazel tov!
Oh also, let's keep doing what we are doing. Look at Germany, and Japan. That's us in 10-20 years. Stagnate incoherent and slowly collapsing.
Yes, agree Oren. They are sociologists. Better description. This is what they used to be called not that long ago. But economist sounds more scientific which makes them appear more creditable. Of course you have to have science! Everybody has science now. If not appearing scientific you will not be creditable.
This piece again shows how academia shuns and looks down upon the trades. The trades people are below them. They have been conditioned in school to think this way. If you don't have a shirt and tie on you are slow and not very bright. Funny too here, as the principle so excellently points out that manufacturing today is in sterile or clean environments usually with robots and computers being used. Most of these so-called intelligentsia don't even realize what a modern manufacturing plant does or looks like.
The University = The "New Religion" the religion of nihilism
The discussion here seems to be about broad tariffs, which as the new commerce secretary Lutnick said will help the US make T-shirts, towels and sneakers domestically. That sounds like not a great plan. On the other hand, targeted industrial policy aimed at high value things like semiconductors (Biden’s CHIPS act) can create positive development such as the Arizona quality jobs and training programs cited by the author here.
So once again, Oren supplies some valuable and necessary corrections to common economic fallacies of the center left and therefore many people at large. Good, period, full stop. Unfortunately, he precedes it with plenty of the risible, tendentious sneering that other comments note, which have both the intent and effect of priming the revolutionary faithful to swallow whole whatever follows, not to mention blanket dismissal of opposing viewpoints as the productions of helpless morons, if not Marxist tools. Oren also ignores an important implication of his own analysis. He correctly points out that it took decades of disastrous free trade absolutism and consequent deindustrialization to bring us to our current state of dysfunction. What are the chances that pursuing a rapid, chaotic and global trade war, conducted personally according to the senseless intuitions of a transactional narcissist, and starting with meat ax attacks on our geopolitical friends and allies, is going to reverse in short order a deindustrialization process that took decades? What set of ceo’s and forward looking entrepreneurs is going to invest heavily, and soon, in onshoring supply chains under circumstances subject to the whims of an unstable and deteriorating King Lear? For a pundit who rightly insists on returning economics to the study of the real world in its full social and political context, it seems perverse to ignore the fact that the forest is on fire as he carefully explains how forest health for the long term can and should be adjusted.
Agree with you that I wish Oren’s approach was a bit lighter. Seems like no secret that he hates Justin Wolfers’s work (and maybe Wolfers personally).
I think you also hit nicely on a key tension in Oren’s work: he is advocating for an “intellectual project” (i.e., reversal of the impacts from a decades-long unfavorable trade / industrial policy) that requires deep intentionality and coordination (domestically and internationally) from our leaders, yet there is (seemingly) less than zero attempt by the current administration to provide the long-term strategic vision of why America needs to (understandably) course correct in certain areas and / or how our best trading partners can constructively fit into that long-term vision. Instead, it’s just whipsawing disorder and confusion for all. So, Oren is sort of left holding the bag defending the actions of an administration that is executing (super) suboptimally on the intellectual project. (This is not to say that even with perfect execution it would work, but if you’re going to attempt it, at least do it credibly so businesses can plan, etc.) I’m curious at what point he (maybe) “breaks” from his qualified defense of his team. My sense is that it will be when the TCJA gets extended, further eroding our fiscal health…
Actually, comparative advantage itself is the best and simplest refutation of Stevenson's now-deleted tweet. If we had a comparative disadvantage in something, that would imply it was relatively *more* expensive to manufacture here in the US, which would imply that costs -- of which wages are one part -- were *higher* here. So how could you say that reshoring would lower wages?
There are many good arguments against tariffs, but saying they would lower wages makes no sense at all.
I can’t believe that people give money to financially support this type of poor effort.