May 28, 2008

Mankiw on free trade

Mankiw argues on his blog in favor of free trade:
Some economists take the libertarian view that people should presumptively be allowed to engage in mutually advantageous trades, absent any externalities. Under this view, the restricted-trade equilibrium has no claim to moral superiority--indeed, just the opposite. The fact that some people lose when trade is opened up compared to a restricted-trade status quo is of little moral relevance.

I don't get it. Isn't the fact that some people lose with free trade an externality? He the writes:
The fact that some people lose when trade is opened up has no philosophical significance.

What the hell is he talking about? Does anybody know?

In other news, a very, very cool thing: Free documentaries on-line!

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