Question

8. Discuss this statement: "Free traders win the economic arguments, but protectionists (those who favor tariffs) often win the elections."

9. Do you believe that American consumers should boycott goods made by exploited workers in Less Developed Countries? Explain why this might or might not work.

Answer 1

8. Free trade creates a win-win situation for all and all the participants are better-off through free trade. However, the benefits of free trade are not very obvious and immediate to a common voter. A common voter is more likely to think that importing is bad and a country should only export. One needs to understand the economic logic in order to understand the benefits of free trade. On the other hand, the negative sides of the free trade are very easy to see. For example, free trade results in job loss and some sectors and new job creation in other sectors. The loss of jobs becomes more visible and obvious to a common voter rather than the creation of new jobs. So, a layman is most likely to fall into the trap of believing that that free trade is bad. Protectionism seems to be protecting domestic industries and jobs when they are actually harmful to the economy in the long run. However, protectionist policies sound more attractive to an average voter as the benefits of protectionism seems to be more obvious. Politicians exploit this gullibility of common voters to advocate protectionist policies in order to win votes.