Free Trade versa Innovative Technologies, disruptive change

People from G7 seems to feel it's one thing to have your job automated by a robot, and quite another to lose it to someone in China who makes 2 to 20 dollars a day. Technology feels like progress, while trade feels like theft. We treat trade and technology differently, in other words, because we fear the foreigner more than we fear the geek. If we were rational, of course, we'd find geek much scarier, far more of our economy's disruptive change comes from innovative technologies than from trade. But because we're not rational, because people have a darker, xenophobic side, those who want to see the world capture the gains from trade feel extra duty to support it. This is what economists are really up to. Their redeeming secrets is that in hyping the case for free trade, and shielding us from the truth, their ultimate aim is to keep markets open enough for capitalism to work its magic and lift billions of desperate people from grinding poverty in the world's developing countries.

Yes, there are benefits to free trade for advanced nations like the United States and G7 and yes, closing the borders would hurt all sides - but the biggest gains from trade at this juncture in history will go to poorer nations, who stand to benefit most as advanced technologies are dispersed.

The big gains are going to come from the poorest people in the world. And the gains to the richest countries are modest, at best. And they, unfortunately, come in this very skewed form, where a few people, the most talented people who can benefit from this arbitrage of technology across regions, they do terrifically with it, but bunch of other people in the United States or G7 suffer. This commitment to free trade for a lot of us comes from this real concern for the most disadvantaged people on earth, but it comes in this ambivalent way. Free trade is radically reducing inequality between nations. In that sense it's a very equalizing force in our lives right now, and if you care about the worse off people in the world, it is a terrifically beneficial. But unfortunately it's accompanied by increased inequality within nations. So ironically, worldwide inequality can be going down dramatically, but everybody in every nation sees inequality going up, because they're looking at what they see nearby.

This desire most economist share for seeing trade and capitalism lift poorer nations shows why the CLASH between the new trade skeptics and the old trade purists has been utterly misconstructed by the PRESS. It is not a showdown between protectionism and free trade, as the media suggest. This is the dispute about which tactics can best assure that we have no protectionist backlash in wealthy nations (G7) that ultimately hurts the world's poor. The purists act as if we cannot let the "kids" know about the losers from trade, or people will misuse that knowledge and we'll be on our way down the slippery slope....

Polls show that Americans of all education and skill levels now think Globalization is BAD for the United States and G7 economies, a dramatic change from a decade ago. We need to acknowledge the obvious, skeptics say, and get serious about new forms of economic security that will keep this anxiety from spawning a revolt against open markets altogether.