Would you like to know why we’ve lost millions of middle class jobs over the last 30 years and endured annual trade deficits of more than $500 billion for 15 years? Would you like to learn what we can do to right the ship? Then, buy, read, study and refer to “Free Trade Doesn’t Work: what should replace it and why” by Ian Fletcher. It ranks in my top five books on economics. It’s that good! The title makes bold claims; the content delivers.
In his effective 267 pages of text, Ian Fletcher dissects and often demolishes fundamental teachings about the benefits and risks of trade and replaces them with evidence based updates. He then recommends a practical alternative based on clear objectives. He wastes no time on polemics or blame as he provides easily understood and well documented evidence sprinkled with stimulating analogies to support his thesis. He displays a refreshing and sensible appreciation of how we got ourselves into this unsustainable mess and why so few economists speak out against conventional wisdom, even though most of them probably know better. His clear and simple explanations of complicated issues remind me of an old axiom: “The better you understand something, the more simply you can explain it.”
Free Trade Doesn’t Work has three sections: The Problem in which we are mired, The Real Economics of Trade in which evidence and history contradict the prevalent mythology and The Solution a relatively simple but politically controversial alternative to Free-Trade that has been successfully practiced in disguised forms by the Japanese and Chinese, among others.
The Problem section describes our stumbling embrace of free trade without a strategic objective. Its causes are multi-dimensional but include short-term gratifications and fallacious beliefs about the automatic benefits of trade and its natural corrective mechanisms. One of the most telling Continue reading