What's Wrong with Protectionism: Answering Common Objections to Free Trade (Mercatus Center at George Mason University)

A “principles of” primer that starts strong and stays that way. The opening chapter on comparative advantage is probably the clearest explanation I’ve seen—countries with an absolute advantage in many industries, such as the U.S., should specialize in what they’re “more better” at, such as capital-intensive technology, aircraft, and services. Countries with an absolute disadvantage in productivity, such as China or Bangladesh, should specialize in what they’re “less worse” at—mostly labor-intensive assembly and low-skilled manufacturing. This kind of specialization reduces opportunity costs.If the U.S. had a massive garment industry, for example, it would have to sacrifice untold billions of dollars of additional value it could create elsewhere. It can create more value by specializing in high-value-added sectors and leaving the rest to others, even if those others are less productive in absolute terms. That way there is more wealth to go around for everyone.The rest of the book is just as good, especially the chapters on manufacturing and the trade deficit. Highly recommended, especially for people new to trade policy.

Each chapter states an objection to free trade and then demolishes it using both theory and history. Clear, convincing writing, accessible to all readers.1. Americans cannot compete2. Free trade harms the United Stats3. The trade deficit is bad4. The United States is losing its factories5. Trade destroys jobs6. Trade lowers wages8. The politics of trade9. Trade is not fair