Fight not the dragon
The unwisdom of economic retaliation against China

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Article Highlights

  • The classical case for free trade was developed in a mercantilist world.

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  • Free trade almost always benefits the country adopting it, regardless of the trade policies of other nations.

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  • Free trade thus presents a prisoner’s dilemma.

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Oren Cass’s argument for threatening trade sanctions against China (“Fight the Dragon,” June 23) begins to go wrong from its very first words. He allows that the standard economic model of trade is correct in holding that all countries are better off if all practice free trade, but he says the model does not account for the fact that a country that refuses to practice free trade can reap benefits at other countries’ expense. Free trade thus presents a prisoner’s dilemma.

Cass himself is prisoner to a misconception, for he does not understand the model he is criticizing. That model does not ignore the possibility of a prisoner’s dilemma but rather denies that it exists. After all, the classical case for free trade was developed in a mercantilist world, and it argued that free trade almost always benefits the country adopting it, regardless of the trade policies of other nations.

This article appears in the July 7 edition of National Review. The complete text is available to National Review subscribers here.

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Michael R.
Strain

 

Ramesh
Ponnuru

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