As I was exiting the Federal Reserve Bank of Boston the other day, I noticed a large crowd gathered outside in protest of the World Trade Organization (WTO) summit. Men and women chanted in unison, "Hey, ho, the WTO has got to go!" I had heard about the protests, but as I walked through the crowd I was overcome by a feeling of disbelief. To me, this serious protest looked more like a "Naughty by Nature" music video than a rally and I had the passing urge to turn to the chanting protesters and say, "Hey, that's pretty good! Now try this one: You down with WTO? Not me; oh, no! Who's down with WTO? Corporations, yo!"
All joking aside, the WTO incident requires serious consideration. I was pleased that so many citizens were interested in a topic often relegated to the elite diplomatic negotiations of elite diplomats, and heartened that they were very serious about expressing their opinions. However, I took objection to the content of their criticism. Many of these people were protesting because they believe the WTO should be legally obligated to satisfy concerns, such as the environment, animal rights and labor conditions. While I agree that issues like these should be considered in trade negotiations, I believe that using such criteria as the basis for legislative restrictions on trade deals would be harmful to world trade and to the world.
The WTO is an institution through which nations can promote the mutually beneficial process of international trade. As a multilateral organization, the WTO facilitates interaction between sovereign nations. When trade takes place among two nations that face different tradeoffs between production inputs, both gain through an increase in average real per capita income. This proposition is generally true according to economic theory, and has been robustly demonstrated by research. Although the gains from trade benefit the "average person," it is true that some people will actually lose, but this loss is necessary to benefit the country as a whole.
Moreover, the decision to trade can be thought of as a component of a nation's pursuit of economic efficiency. If it is cheaper to import a good from another country rather than produce it domestically, such a decision may make sense even though some citizens would lose jobs due to the new competition. The benefits to the average consumer should be measured against the losses of the displaced workers.
We are faced with two contending styles of argument; broad economic logic versus particularistic personal protest. An example of economic logic is the argument contained in the previous paragraph, which deals with the gains from trade. Personal protest is exemplified by "buy American" activists who oppose the importation of certain products because some Americans will lose jobs.
Both of these modes of argument have objective and subjective sides. Economics can be very subjective and emotionally loaded when commentators wax poetic about increased trade ushering in a "global economy," and shortly thereafter, world peace. Personal logic can be very objective when intelligent and logical links are drawn between the pain which people suffer and their resultant quality of life, civil rights, or other reasonable staples of civilization. However, I assert that in this case, appeals to economic logic tend to be more unique, more valid, and less susceptible to emotional cloudiness, than appeals to personal logic.
How do I arrive at this assertion? Economic arguments have a level of general validity if one accepts the assumptions behind a given scenario. However, personal logic is not based upon any similar assumptions and what one person defines as sad, may have no relation to the criteria a second person uses to identify this emotion.
The very nature of "personal logic" encourages arbitrary arguments. True, one can find people whose lives may be negatively impacted by trade, and considering these people in isolation yields the conclusion that we should decrease trade. By the same token though, one can find people who may benefit, leading to the conclusion that we should increase trade. The "weep for this person" philosophy is just as valid as the "be happy for this person" philosophy.
Finally, economic arguments about trade are less emotionally messy. Protesters who dress up in sea turtle costumes are clearly appealing to the cuteness of these animals, imploring others to imagine the pain which such adorable animals suffer when they are accidentally trapped in the nets of exporting fishermen .
In short, an emphasis on personal logic in an inappropriate area of discussion tends to lower the level of public debate. I stop short of saying that the concerns of personal logic should not be considered within the context of trade agreements. I merely contend that it would be harmful to use personal logic to concretely constrain the trade process. It may be possible to implement some vague considerations without harm, but more likely than not, the slippery slope would lead downward, to a world with less trade and prosperity.
