Trade, Technology, And Jobs: How To Think About Free Trade

Some people support trade restrictions because they believe tariffs and quotas protect American jobs. 

These restrictions may protect certain jobs but they ultimately result in fewer economic opportunities down the road. 

It turns out the economic effects of trade are remarkably similar to what happens when a new technology is invented. 

In both cases the positive effect is that goods and services in the relevant industry get better and more affordable for everyone, and new jobs are created to complement newfound opportunities. 

The negative effect is that some jobs may become less needed or even obsolete. 

Consider what happened to farmers in the 20th century. For most of human history, growing food was a labor-intensive effort. 

But then, new technology and farming methods were invented that allowed us to grow more food with fewer workers. 

The government could have protected agricultural jobs by outlawing new farming methods or equipment, but that would have ultimately done more harm than good. 

Food prices would be higher and people would be poorer. 

Instead, workers found other jobs that best matched their skills in the short run, and retrained or learned new skills that paid off in the long run. 

The next time someone proposes trade barriers, imagine instead that they had proposed outlawing a new invention.