Both Republican and Democratic economists are vexed by such anti‐trade sentiments. They run completely counter to the reality that allowing unfettered exchange of goods and services provides the surest means of promoting economic growth. Policies should be designed to welcome imports into the country, not keep them out.
Why is there such a big disconnect between popular opinion and sound economics? The answer may be explained by millennia of human evolution.
Our ancient ancestors were hunter‐gatherers who lived in small groups. Survival required looking out for the welfare of the clan. Tribal self‐sufficiency was essential; there likely would have been no friendly outsiders to turn to in time of need. That background shaped today’s human gene pool, and our instincts still reflect that evolution.
Encountering people who were not members of the clan would have involved risks. However, if there was no need to fight or flee, trading could take place. One group might wish to exchange decorative cowry shells for some of the other group’s surplus arrowheads, for instance. If there was sufficient trust to allow such bartering, both tribes would come out ahead. The gains from trade were tangible.
Mankind in the 21st century still possesses a strong sense of group identity, although the groups (countries) tend to be much larger. Today’s citizens mostly are far removed from the actual exchange that occurs when transactions take place across borders. It can be difficult to see the gains that one’s own country makes from international trade, so it’s easy to assume that the other country is receiving all the benefits. This can prompt an intuitive reaction to restrict imports in the belief that doing so will support the “home team” and promote national self‐sufficiency.
When considering trade issues, economists prefer to abandon reliance on visceral instinct and instead use thoughtful analysis. The reality is that key economic concepts can be counterintuitive. Certainly, that is true for two ideas that are central to understanding why free trade is so beneficial.
The first is that countries imposing import restrictions always will do more damage to their own economies than to the economies of exporting nations. Despite how fundamentally gratifying it may feel to impose a large import tariff on “unfairly traded” products from other countries, such a move will be economically self‐defeating. Domestic producers of the goods in question may obtain a modest benefit from the import restriction, but that gain will be outweighed by the higher costs borne by domestic consumers. Countries at which the new import duties are aimed also will be hurt by them to a lesser degree. But their exporting companies still will have access to other global markets, and their consumers stand to benefit if an abundance of formerly exported goods causes prices to fall in the home market.