As the election season heats up, candidates from both sides of the political spectrum seem to agree on one thing: Free trade hurts Americans. There is also a fierce debate about whether—or to what degree—free trade increases income inequality in the country.
As commentators continue to disparage free trade (often on products like smartphones, computers, and televisions that have become affordable to the masses because of free trade), one important aspect is being overlooked: trade’s role in reducing global income inequality.
Companies looking for the most efficient places on the globe to manufacture their products are unwittingly helping the poorest people in the world, reducing global poverty and global income inequality.
George Mason Economics Professor Tyler Cowen notes:
Globalization, free trade, and other foundations of the global economy have been and can continue to be the greatest equalizers the planet ever has seen. Billions of people who would otherwise live in poverty are now far better off.”]
While attacking free trade may make for good politics, it is terrible economics that threatens the continued prosperity of millions of people around the world.