It hasn’t escaped the notice of pundits that the political iconoclasts Bernie Sanders and Donald Trump have something in common: they’re sceptical about trade. Trump, for example, has riffed expansively: “We don’t win any more. We don’t beat China in trade. We don’t beat Japan … We can’t beat Mexico, at the border or in trade.” Sanders expressed his concerns with a little more precision: “While bad trade agreements are not the only reason why manufacturing jobs in the US have declined, they are an important factor.”
Both men have vastly outperformed expectations in the primary campaigns. There are many reasons for that but perhaps the simplest explanation is that freer trade has inflicted a more grievous toll than economists, myself included, had expected.
Fifteen years ago, the conventional economic wisdom was that free trade was almost unambiguously a good idea. Here’s the basic logic. There are two ways for the British to get hold of wine. We can grow and press our own grapes, or we can make something that the French want and trade with them. If we’re good at making, say, computer games and the French are good at making wine, then trading is the better way to get what we want.