The outlook for free trade is bleak. Why? Why is protectionism so popular even though economists know it's a bad idea? Here are some possibilities:
1. The gains from free trade are dispersed - lower prices for everyone. But the costs are concentrated - (temporary) job loss for a few. As Larry Summers says, if you've lost your job, lower prices are little solace. And the few losers get more publicity, and make more noise, than the many winners.
2. Even the gains from free trade are not obvious. How many people, on buying a £10 pair of jeans, give thanks to free trade that they don't have to shell out £20 more, as they did a few years ago? Similarly, the tariffs we must pay on Chinese shoes are a hidden tax, one that doesn't appear on the price label.
3. People lose their minds when they think about national economies. It's obvious that, as individuals, we get rich by specializing in the trade we are least bad at, and buying stuff from others. When I go to work, I'm exporting. When I go to Tescos, I'm importing. No-one thinks of it this way, though.
4. People associate free trade and globalization with rising inequality, because both have occurred together in the UK and US. But correlation is not causality. Free trade has helped many of the poor - think how cheap it is to clothe a family thanks to imports from China. And rising inequality probably has more to do with technical change, managerialism and rent-seeking than with globalization.
5. Free-traders can be cavalier about the fact that some people lose. They think it sufficient to point out that trade is a potential Pareto improvement, without asking: can the gains be spread more widely?
My question is: what can economists do to combat these sources of support for protectionism?
part of the answer is better propaganda - like this and this - to make the case for comparative advantage.
But shouldn't we also think of better ways than tariffs and quotas of helping losers, through better insurance and redistribution mechanisms?