March 2nd, 2007 by Hafiz Noor Shams
Protectionists always argue that free trade hurts the poor. Professor Mankiw quotes the US Treasury Secretary Paulson as the US battles its own rising sentiment of protectionism:
Thus trade helps Americans provide for their families. When special interests seek protection in the name of low-wage workers, we should acknowledge that limitations on imports do not benefit the vast majority of Americans. They deny people the freedom to choose from a broader array of goods and services, and impose a cruel tax on people who rely on low prices to stretch their family budgets. The cost of protectionism falls most heavily on those who are least able to afford it — the poor and the elderly.
It should be noted that free trade means absence of trade-distorting policies which include tariffs and subsidies.
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Posted in Economics
Tags: free trade, protectionism
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