Economics

Reason.tv: Jagdish Bhagwati on Free Trade, Protectionism, and Barack Obama

|

Free trade is never more necessary—or vulnerable—than in times of economic distress. The current global downturn is no exception. Protectionist barriers have shot up all over the world, including the United States. Earlier this year, Congress killed a pilot program allowing Mexican trucks to transport goods across America and included "Buy America" provisions in the stimulus bill banning foreign steel and iron from infrastructure projects funded by the legislation. More disturbingly, President Barack Obama, after chiding Congress for flirting with protectionism, initiated his own ill-advised affair by imposing a 35 percent tariff on cheap Chinese tires.

If the world manages to avoid an all-out trade war of the kind that helped trigger the Great Depression after the U.S. imposed the Smoot-Hawley tariffs in 1930, it will be in no small part due to the efforts of one man: Jagdish N. Bhagwati, an ebullient and irreverent 76-year-old professor of economics at Columbia University. Bhagwati has done more than perhaps any other person alive to advance the cause of unfettered global trade.

A native of India, Bhagwati immigrated to the United States in the late '60s after a brief stint on the Indian Planning Commission, where he learned first-hand the insanity of an economic approach that tried to modernize a country by cutting it off from world trade. Since then, he has devoted his efforts, both in academia and in the popular press, to showing that there is no better way of improving the lot of both advanced countries and the developing world than through free trade. His path-breaking contributions to trade theory have put him on the short list for a Nobel Prize in economics.

Though a dogged trade advocate, Bhagwati is anything but dogmatic. He is a free spirit who draws intellectual inspiration from many disparate ideological camps. A self-avowed liberal, he is also something of a Gandhian social progressive, though Gandhi himself supported economic autarky. Bhagwati works with numerous Third World NGOs on a host of human rights issues. Yet he has no problem taking on these groups—or his famous student, Nobel laureate Paul Krugman—when they question the benefits of trade. In fact, he devoted his 2004 magnum opus, In Defense of Globalization, to a point-by-point rebuttal of these critics. Although he doesn't vote Republican because he dislikes the party's nationalistic jingoism, he readily declares that Democrats pose a far bigger threat to international exchange than Republicans.

Last summer, Shikha Dalmia, a senior analyst at the Reason Foundation, interviewed Bhagwati in his New York office. For a transcript of that interview, go here.

This video interview was filmed on the same day and conducted by Dalmia, Reason Associate Editor Damon W. Root, and Reason.tv's Dan Hayes, who shot and edited the video. Approximately 6 minutes.

Scroll down for embed code and downloadabe iPod, HD, and audio versions. Subscribe to Reason.tv's YouTube channel and receive automatic notifications when new material goes live.

NEXT: Reason Morning Links: Sex Pistols and Nuclear Arms

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. This is not spam

  2. I read Bhagwati’s “Protectionism” in my MA coursework, and found him to be a first-rate intellect and superb writer. It’s puzzling, however, to see him backing a party whose policies almost certainly lead to the very thing that he deplores. While Republicans might wave the flag more than Democrats, they are easily the more “nationalistic” when actual legislation is at issue.

  3. Speaking of free trade, the Administration came to an agreement with Brazil over cotton subsidies– we’ll just subsidize Brazilian cotton farmers too. Sigh.

  4. How does he marry up his belief in social liberalism, which inevitably leads to anti-free market domestic policies, with his belief in free trade?

    Don’t domestic markets that are controlled to advance various socially liberal agendas inevitably lead to restrictions on international free trade?

    1. Exactly my point: Socialism, as Mises explained, always leads to nationalism as resources come to be seen as “our” oil, “our” wheat, “our” steel. It will be no different here, and maybe worse.

  5. Let your voice be heard by other Tea Party members and exchange information:

    http://teapartyrevolution.com/

  6. No problems – US needs to export to recover from The Great recession, so lets export. If China won’t float the Renbi then tariff the difference in imports from China.

    If American companies send jobs to India for software development and keep the money over there to avoid taxes then tariff the SW when it comes back to correct for lost taxes and lost jobs. (No BS about low skill jobs Americans won’t do here – SW engineers are high skilled and many Americans want those jobs.)

    If Asia taxes American cars to sell over there, then tariff their cars when they come in here.

    Same for food – yes free trade with India means no food protectionism either. American Rice to Asia or tariff Asian goods for the blocked rice sales.

    Free trade is great – just make it fair trade.

    Time to take to gloves off on free trade and for America to get its hands bloody again.

  7. The problem with free trade is that what it accomplishes – economically efficient production – is only a good thing if it makes possible politically acceptable distribution. Free trade does not put goods into the hands of people who want it. Jobs, ideally, do that. If the jobs go East, we either need to “redistribute” those jobs (by tariffs) or redistribute the wealth that the few Americans who have jobs accumulate. Otherwise, there is no reason for unemployed Americans to support capitalism politically.

    History makes clear that redistributing wealth just makes the wealth evaporate. Redistributing jobs does suppress demand by raising costs, but it also increases demand by putting more money in more people’s hands. I’m not saying it’s a wash – maybe it is, maybe it isn’t – but it can equilibrate in a way that redistributing wealth does not.

    America was prosperous before Third World labor came along, so there’s no reason it cannot be prosperous without it. All we have to do is rebuild with tariffs the barriers that the oceans formerly provided.

  8. It is a myth that tariff walls erected by developing nations would save jobs. Stopping cheaper and better imports would make the inhabitants of developing nations poorer than before. By employing the policy of import substitution India provided second rate home made goods to its own people at more than first rate prices, Tariff walls also gave rise to smuggling of electronic goods gold and diamonds and many dreaded smugglers rose to prominence.Tariffs also generated corruption in customs department to such a level that a prventive officer became a better prospective son in law than an industrialist.

  9. Thank you very much for sharing this wonderful information.

  10. Thank you very much for sharing this wonderful information.

  11. Beer and wine kisumu 2 possess a small amount of methyl alcohol, also known as fuel line antifreeze along with cook oven fuel. It is just a harmless quantity in ale and wine beverage but when distilled atmbt sapatu the wrong temp a dangerous amount of methyl alchol can be done.

Please to post comments

Comments are closed.