The problem is Bastiat's "seen and unseen" problem. It's easy to measure trade volumes, so that's what we do. That's what the Economists look at, which is why they all tell us it's good for us. They're right in that assessment, as far as it goes - what they see is beneficial.
But what about what they don't see? Andy Grove dies this week, and the ex-Intel CEO had some very strong feelings about important things that are hard to measure. The unseen:
The lesson Grove had learned at Intel was that success was all about scale. As soon as a country loses its high-tech manufacturing base, it forgets how to do many things, and loses its ability to scale in a new marketplace. The spoils go to those who retain a competitive manufacturing base.
TVs were a good example, Grove wrote. Princeton economist Alan Blinder had written that the absence of TV production in the USA, as TVs became a low cost "commodity," was a good thing.
Smart developing nations have long ignored Ricardo's "Comparative Advantage" argument, for precisely this reason. Alas for our corrupt political class. They've sold our future to Wall Street for a mess of campaign contributions."I disagree. Not only did we lose an untold number of jobs, we broke the chain of experience that is so important in technological evolution. As happened with batteries, abandoning today's 'commodity' manufacturing can lock you out of tomorrow's emerging industry."
Rest in peace, Andy Grove.