The Unexamined Roots of the Case for Trade: More stuff is always better

International trade has been growing as a point of contention since the Trans-Pacific Partnership arrived in the public sphere a year ago, and has become increasingly prominent in the US presidential primaries. But lost in discussions about who gets hurt who is exploiting whom is a critical perspective on the central benefit of free trade: cheaper access to consumer goods.

The discussion of the effects of trade is simple to conceive of as a back-and-forth:

• + Trade Case: Comparative Advantage!  If we can Product A more efficiently than Product B, and another country makes Product B more efficiently, then it makes more sense to make a lot of Product A, sell it to the other country, and buy Product B from them cheaper than we could make it ourselves. We'll spend less money to get the same or of both Products than if we made everything at home.
• - Trade response: but when we start importing Product B instead if making it in America, all those good people at Product B factories lose their jobs!
• + Trade Response #1: but if we've got more trade overall, more people get jobs at Product A factories, so it balances out.
• + Trade Response #2: plus, the more trade we've got, the more efficiently everything is being produced and consumed, so we can afford more Products of every kind.
• - Trade argument, at this point, usually devolves into demonizing foreigners who are "taking" the jobs of workers in Product B factories, or something about national pride, along with suspicious attempts to portray Product B factory workers as more truly "American" because of their blue-collar status, and thus more worthy of our protection--or else more well-founded targeting of the increasing profits that accrue from trade to the owners of capital.

Ultimately, though, economists and politicians defending more trade (often rolled into "globalization") are able to carry the argument not by parrying these points, but upon the seemingly unassailable Response #2, that the broad benefits for all outweigh the costs of the few who lose their jobs.  This utilitarian, even possibly socialist logic of "the needs of the many outweigh the needs of the few" (Spock, or Jeremy Bentham?) is hard to argue against, which helps explain why the other side goes of into other types of counter-arguments.

But while the logic may be sound, the assumptions that underlie it deserve scrutiny.  What exactly is this broad benefit of trade that accrues to all?  Binyamin Applebaum (NYT) distills it as "Everyone gets a discount," while Thomas Black & Isabella Cota (Bloomberg) unpack slighlty more "the benefits of the surge of cheap imports, primarily subdued inflation that preserves consumers' purchasing power."

More and more access to cheaper physical things is the great benefit that trade provides--and indeed, if we can buy a TV from China for $300 instead of $600, are we not better off?  If we can afford to buy farm-raised shrimp from Southeast Asia for $6.99/lb instead of paying $12.99/lb for shrimp caught in the Gulf of Mexico, don't we have access to a better life?

The central benefit of trade depends on the refusal to posit that the answer to these questions might be "no".

But if we examine the lives of genuinely struggling Americans, facing poverty, joblessness, and the inability to climb up even the lowest rungs of the economic ladder, are these problems connected to constrained access to cheap goods and food? Is clothing too expensive? Cell phones? TVs? No: lots of families are trapped in cycles of poverty, but not because there is too little cheap stuff on offer to American consumers. Quality housing, less exploitative legal systems,  safe neighborhoods, and better-resourced schools are lacking, but those cannot be imported.

And what if we examine the lives of Americans in the precarious middle-class? It may be that the latest smartphone or tablet is more accessible because of trade with China, and new school clothes and fall fashions are more affordable because they come from factories in Bangladesh or Mexico. But the speedier integration of new technologies into the expected consumer basket has also loaded families with new expenses: your cable-internet package with all the right channels and download speeds to accommodate streaming over multiple devices may cost 6-7 times what you paid for cable in the 1980s, but incomes have not kept pace. And your family plan for smartphones is a new monthly bill altogether that 1990s budgets weren't forced to juggle. Indeed, many blessings of the "surge of cheap imports" come with monthly service charges that load expense onto services that cannot be replaced by trade (cell phone service cannot be imported), so are we economically better off?

A deeper problem is this: the access to lots more cheap imported goods has enormously expanded the potential participants and arenas of the most dangerous game in capitalism: "Keeping up with the Joneses." Conspicuous Consumption (Thorstein Veblen) is on the rise in reaches of the American income spectrum where it would have been simply unthinkable a half century ago, and in realms of consumption then not even imaginable: which G of iPhone do you have? What store do you buy your organic baby food at? Do you get the free version of Spotify or do you pay for Pandora?

Conspicuous Consumption, as a concept, is an enormous challenge to the basic assumptions upon which argument for trade rests. More trade is good if we are always only spending money on something that really makes our lives better, and thus, if any given thing we can get is cheaper, our lives are better because we can have more of it, or more of something else we otherwise couldn't afford that will make our lives better.

Conspicuous Consumption is the idea that due to social constructions of power and the fear of feeling inadequate (not to mention the power of marketing to get us to spend money on things that do not make our lives better), a lot of our spending is not driven by well-informed decisions about what we really want, need, or will make our lives better, but rather is wasted on things we're bamboozled into buying--many of which may make our lives much worse.

In the end, if trade's main benefit to "the many" has been expanding their capacity to buy more and more cheap goods that often do not make our lives better, but frequently make them more cluttered, expensive, and unhealthy, then the logical structure buttressing the “broad benefits” of trade falls away.