Mad about Trade: Why Main Street America Should Embrace Globalization

The belief that trade is bad or trade is disadvantageous to the United States in particular seems to almost be a cult religion. Contrary to constant drumbeat that trade has created a drain on high wage employment, author Dan Griswold suggests employment changes from merchandise trade flows are probably a wash. When Comparing the US trade deficit with changes in unemployment (p.81), Griswold shows that a higher trade deficit is negatively correlated with the unemployment rate, as a stronger economy often leads to greater consumption and higher imports. He also knocks down the widely held assumption that broad-based prosperity is associated with manufacturing employment. It is true that manufacturing employment has declined; however, that occupation was never the source of employment for a majority of US workers as the share of US employment associated with manufacturing was never more than one quarter. Also, sectors of the economy that grew while manufacturing declined had higher average wage rates (p.37), whatever manufacturing's virtues; it is not the key the well-being of the masses. Griswold also does a good job showing how trade barriers hit the poor the hardest by increasing the price of mass consumption goods and that government preferences or protections against foreign competition often benefit only a narrow slice of American workers (those working in protected industries) at the expense of their compatriots. The one issue Griswold doesn't really address but probably could have is the long term effect of the continued trade deficits. Could they go on indefinitely? He doesn't really say even though the answer is "yes" as long as the economy grows at a sufficient rate (which is not the case at the moment).

My Cato colleague Dan Griswold does a great job of draining the swamps of ignorance and misconceptions that surround discussions of trade and globalization. Griswold has a gift for untangling complex issues with clear, common-sensical prose, and he uses that talent to excellent effect here. Especially good are his discussions of the effect of foreign competition on American jobs and industry. If you've had the misfortune of watching too much Lou Dobbs and you've contracted a morbid fear of imports and outsourcing, this book is the antidote you need. Alternatively, if you generally support open trade but have trouble responding to protectionist arguments, "Mad about Trade" is a one-stop armory of intellectual ammunition.

Cato Institute trade expert Dan Griswold has written a very concise and readable book about the fundamentals of international trade; it is a must read for any citizen who needs to get up to speed in the facts behind the propaganda we get bombarded with daily. Full disclosure: I am in the steamship industry and my livelihood depends on trade; I have known Dan for a number of years and had him speak twice at our annual trade association conference. That he knows his stuff and can explain it well is beyond question. What made the book particularly compelling for me is that it presents the moral case for trade, and not just the pragmatic one. Speaking as an American, he brings out the benefits we have enjoyed, but also shows how it is trade is lifting billions of the poor out of desperate poverty around the world. Nike's "sweatshops" help the poor, contrary to what the ideological left insists. He does say there are losers as well as winners, but demonstrates that the winners far outnumber the losers, and in the last chapter lays out his prescriptions of how to take care of the losers.

Dan Griswold does an excellent job debunking plenty of myths about free trade and globalization in a friendly, easy to read way that appeals directly to the average American. Although opponents of trade love to use anecdotes and tug on our heartstrings with depressing stories of layoffs and factory closings, Griswold makes sure to back up his assertions with facts and hard data (in addition to some compelling anecdotes of his own). There's no cherry picking of statistics from certain years, but rather a complete picture of who gains and who loses from trade. He directly addresses the fallacies in the points frequently brought up on evening news broadcasts that real wages have stagnated in recent decades and that our country just isn't manufacturing much of anything anymore. He battles protectionists right on their own turf and very convincingly shows that trade barriers in fact have a very negative effect on our country's poorest. Griswold delves into a little public choice theory to explain how our regressive tariff schedule came to be in the first place, and shows the benefits of free trade are often not very visible, but very real. He also convincingly breaks down why our trade deficit with China is exaggerated, and how even for protectionists it can still be patriotic to buy an iPod made from parts from at least a dozen other countries. If I had to recommend one book for any of my friends to read about trade, this would no doubt be it. It hits every relevant point on the issue, providing engaging, fun to read, and easy to understand arguments. I'm an economics major, and even after taking plenty of classes dealing with international trade, I still came away from this book learning some valuable new things myself.

Excellent - this book makes the economic and moral argument for free trade in plain English, easy for the average citizen. It very effectively presents the data to show how all American consumers benefit from free trade and how only special interets benefit from protectionism and corporate welfare. Worth the time - everyone who hears about "fair trade" issues and wants to understand the facts rather than the hype should read this book, and everyone who wants to get the most value for their hard-earned money when purchasing goods should read this book.