Trade and inequality: The role of economists
Dean BakerEconomists have come to play an enormously important role in public policy debates. There use of their expertise to effectively act as priests, telling the less informed public what the impact of their various policy proposals will be on the economy’s future performance. Economists often tell the public that its preferred policy path will not have the intended effect, and may actually lead to outcomes that are the opposite of what is intended.
Since economists, or at least the mainstream of the economics profession, are accorded enormous respect by the major media outlets, any politician who challenges the prognostications from this group is likely to be ridiculed in the media. This ridicule is generally sufficient to derail the career of any politician who does not already possess an independent and determined base of support and/or a vast amount of wealth that she can use to sustain her political career.
As a result of their ability to influence the media, economists can be incredibly important in steering public policy, often in directions that may not be supported by most of the country. Trade policy provides an excellent example of a case in which the mainstream of economics profession has been adamant in pushing economic policies that clearly do not have the support of the bulk of the public.
The role of economists in trade debates is especially pernicious because there is no area of economics in which economists have been less honest about what their models show. They have consistently exaggerated the benefits that are predicted by standard trade models. At the same time they have ignored or downplayed the distributional consequences. In doing so, they consistently deride those who raise questions about the path of recent trade policy for failing to accept fundamental realities of the modern world.
Before laying out this case more fully, it is important to note that I am not raising any questions...