Blinder-sided! The Free Trade Debate Heats Up!

Economist Alan Blinder made the front page of the Wall Street Journal today. His comments on the pains rather than the gains from free trade are likely to cause a stir in economics. Blinder is reconsidering his pro-free trade stance which to economists is akin to Richard Dawkins believing in God.

Former student Greg Mankiw, a very bright Harvard economist and former Bush advisor, is not taking this sitting down. He's rooting for the Jedi; I guess that means team: the free traders.

I love Alan Blinder, both as a person and as an economist. I took courses from him as an undergraduate at Princeton, wrote my undergraduate thesis under his supervision, coauthored one of my first published articles with him, and have been friends with him for more than a quarter of a century. I am therefore surprised to see him lured by the dark side of the force.

The WSJ article is here.

A cutting comment from Professor Mankiw's blog is here:

Blinder's conversion seems to be driven by extremely weak evidence. E.g., on his visit to the Davos summit (his first mistake) he heard how excited businessmen were re the propects of savings from outsourcing; anecdotes from Tom Friedman's book; a dinner where a financial exec told him how good the quality of financial analysis done by overseas analysts, etc.

I mean, the man took a life of rigorous empirical research and replaced it with Lou Dobbs like horror stories as the driving force for policies that would be truly destructive (tax breaks for firms that only hire US workers (destroy the WTO framework), a school system that trains kids to participate in jobs that can't go overseas (whatever that means).

His solutions, in short, range from the banal (better education and training) to the bizarre.

My guess is that he knows his message of alarmism is popular among those who run Congress and may soon run the White House, and he's becoming their favorite economist.

More from Tyler Cowan at Marginal Revolution.