THE BIONOMICS INSTITUTE

The argument for free trade is subtle. It is depressingly easy to argue that it is always better to export than to import and, in particular, that imports from "low-wage" countries are bad for the domestic economy.

In a recent Slate, Paul Krugman (yes, THAT Paul Krugman) exposes what might be called the "Kathy Lee Gambit," whereby protectionists argue that they are really only concerned with the "exploitation" of workers in low-wage countries.<

The real complaint against developing countries is not that their exports are based on low wages and sweatshops. The complaint is that they export at all. And so the supposed friends of poor workers abroad are no friends at all. If they got their way the result... would not just be no sweatshop--it would be no job. And manufactured exports, initially based on low wages, are the only route we know for rapid economic development.... The growth of labor-intensive exports from Third World countries, a development possible only because those countries are able to offset their disadvantages by competing on the basis of cheap labor, has brought about a huge improvement in the human condition, even if the wages look miserably low by our standards."