“Obama on Fair Trade”


“Here we see the view, commonly held by the media and non-economists in our universities, that international trade is a competition, analogous to sports or military competition (sometimes, ‘trade competition’ is compared to the Cold War). If the playing field is not level, then the trade is not fair. Economists, and this view is not limited to Austrians, understand that international trade is the fruit of cooperation, not competition. America and China are not trade competitors. Paul Krugman thoroughly demolishes this fallacy in ‘The Illusion of Conflict in International Trade’ (reprinted in Krugman’s Pop Internationalism). Krugman explains that in international trade ‘it is the illusion of economic conflict, which bears virtually no resemblance to the reality, that poses the real threat.'”

There can be no such thing as a “trade war”, because trade is a mutually beneficial exchange of goods and services between individuals.


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