Properly Identifying the Costs and Benefits of Trade
8 May 2006
News Director, National Public Radio
Dear Editor:
Whatever are NAFTA's demerits, they don't include its reduction of the profits of subsistence farmers in Mexico ("Migrants' Job Search Empties Mexican Community," May 8). Freer trade is supposed to direct resources away from inefficient uses so that they are available for efficient uses. This result is driven by the greater freedom of choice that consumers have under free trade. As consumers stop patronizing inefficient producers, these producers' profits fall, while the profits of efficient producers rise.
Mud-splattered subsistence farmers hurt by NAFTA offer heart-tugging sound bites. But do you really want to return to the days when many ordinary Mexicans had little choice but to buy corn from local farmers who are so inefficient that (according to the expert quoted in your report) they require 72 hours to produce as much corn as a U.S. corn farmer produces in one hour?
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
News Director, National Public Radio
Dear Editor:
Whatever are NAFTA's demerits, they don't include its reduction of the profits of subsistence farmers in Mexico ("Migrants' Job Search Empties Mexican Community," May 8). Freer trade is supposed to direct resources away from inefficient uses so that they are available for efficient uses. This result is driven by the greater freedom of choice that consumers have under free trade. As consumers stop patronizing inefficient producers, these producers' profits fall, while the profits of efficient producers rise.
Mud-splattered subsistence farmers hurt by NAFTA offer heart-tugging sound bites. But do you really want to return to the days when many ordinary Mexicans had little choice but to buy corn from local farmers who are so inefficient that (according to the expert quoted in your report) they require 72 hours to produce as much corn as a U.S. corn farmer produces in one hour?
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
Posted by Don Boudreaux on
Thursday February 22, 2007 at 6:38pm