The Choice: A Fable of Free Trade and Protectionism by Russell Roberts - Term Paper Example

The Choice A Fable of Free Trade and Protectionism Order no. 252041 No. of pages: 3 Premium 6530 The book, “The Choice:” A Fable of Free Trade and Protectionism, written by Russell Roberts is as the name suggests an allegory with free trade as its central idea. Russell Roberts attempts to spur a rational look at the merits and problems associated with free trade. The author very explicitly supports free trade with forceful arguments. He explains in non-technical terms why free trade is beneficial for all in the long run. He also throws light on the fact that restraints on trade makes us poorer. Making a case for free trade is not the easiest thing to do “besides the fact that the principle of comparative advantage is counter-intuitive, the effects of lowering trade barriers are immediate, felt, dramatic, particular, and often painful, but the benefits are subtle, distant, diffuse, and gradual. It makes our job much harder in many ways. But… we have the data.” The Choice explains this in very effective manner. Reading of economic theories in the form of a novel makes it more fun and substantially easier to understand and this the author has succeeded on both counts. The plot device used in this book is Capraesque as in the movie “A Wonderful Life”. The British economist David Ricardo who originally developed the principle of comparative advantage is shown in the court of heaven. He was one of the pre-eminently early voices in favor of trade policy. He is shown to be arguing his case for “removal of his status as a wanderer”. He requests the right to “intervene in human affairs” so as to achieve his rightful status. This request is asked at the time when America is about to embark on a course of total protectionism during the 1960s. If he succeeds in his mission the “wanderer” status would be removed. God and angels are portrayed or projected as firm believers of free trade. He has returned to the earth to execute his final good deed on his way to being an angel, just as Clarence does in the movie “A Wonderful Life.” Ricardo, during his visit to the earth has discussions with Ed Johnson who is the influential CEO of a fictional television manufacturing company. He is Roberts’ fallen mortal who persuades his local Congressman to sponsor a ban on foreign television as his company faces stiff challenge from Japanese television manufacturers. The company manufacturing the television stands to benefit from the protectionism policy. In the wake of positive fall out from such protectionism, the Congressman, Frank Bates, moves on with a protectionist agenda. Ricardo discusses trade with him and tries to convince him that the policy of protectionism followed by his company, though beneficial to them, acted as a detriment to the prosperity of others. Everyone was made to pay high cost for substandard television due to the policy of protectionism. “The Choice,” as suggested in the title is the choice to be made by the businessman. He could steer America towards the direction of free trade or perpetuate the expansion of protectionism. Russell does not hesitate to state that Free Trade hurts some people. Some jobs are lost due to free trade. The humiliation and pain caused due to loss of jobs is real and painful. Using Ricardo as a proxy, the author argues persuasively that free trade leads to the greater good of one and all. When free trade practices are followed the price of goods are less and their quality is of a better standard. The people as a whole have a great deal of opportunity and the options they have allow them to choose the way they lead their lives. The main character resembles the American Everyman, having doubts about the merits of free trade. He is led on to a journey wherein the author mixes masterfully the theories of international economics and macroeconomics. He allows the reader to make their own decisions on the merits of free trade. He does not let them be cowed down by his picture of protectionist America. He also aims to persuade the intelligent layman that wealth is not money or jobs but goods and services. The way to creation of wealth is through trade and specialization which the author calls “roundabout way to wealth”. "The real choice" according to Russell Roberts, "is between a dynamic world and a static world---a world of encouraging people to dream and acquire the necessary skills to make those dreams come true and a world of encouraging people to be content with what they have and to dream less." The arguments put forth by Roberts are balanced, fair and well reasoned out. The arguments of protectionists are not blithely dismissed by him. On the contrary in the ninth chapter titled “The Case for Protection,” he gives a fair and balanced hearing to some of the academic arguments in favor of protectionism. He comes to the conclusion that the benefits of this type of trade practice are essentially academic. A minority of people like the industrialists, benefit from protectionist trade. The benefits of free trade on the other hand are clear and demonstrable and can be felt across all section of society. At the end of the book the author, through the protagonist reveals to Ed, what life would be like in America if it were to become self sufficient. In other words he tries to give a picture of a world without free trade. He does not portray America as totally destitute but presents Ed’s children as happy and comfortable when they have grown up. He tries to show the bigger picture of lost opportunity. The protectionist policy of America makes them comfortable but does not give them the avenues to be all they could be and that is the real shame of protectionism. Roberts does a great job of putting in the dialogue format, the fundamental issues behind the debate over free trade and protectionism. He does so by using the characters of Johnson and Ricardo and makes them converse in a manner that is engaging, informal and interesting. Roberts looks at both the pain felt by people in the face of change and the values created by the efficiencies of free trade. The author through the book lets the reader know his affinity for the free trade policy and the reader is not left in any doubt what the position of the author is with regards to free trade policy. He does an excellent job of getting across some complex trade theories in a very enjoyable way. Reference Russell Roberts. The Choice: A Fable Of Free Trade And Protectionism third edition. Read More