Arnold Kling brings up a good point that, “With no government, arguing against free trade would amount to trying to talk someone out of making an otherwise voluntary exchange.”

This point was motivated by the observation that, “nations generally gain from trade, however, it is quite possible that international trade may hurt particular groups within nations… .” (Krugman, Obstfeld). This begs the question that the nation-state is the primary unit for assessing economic gains and losses. What Krugman and Obstfeld mean is that if the United States removes all tariffs on imported sugar, then the economic gains will be greater than the economic losses (consumer prices for sugar and goods in which sugar is an input will decrease), but a particular group will be economically hurt. The latter would be the domestic sugar cartel, er, industry.

Of course, this is only true if you assume that protectionism is the original state of affairs. This isn’t to say that the alternative is some Hobbesian wild. However in order to deregulate, one must first have regulated. Instead then of thinking about the gains to consumers and the losses to the domestic producer, it might be fairer to think about the situation in reverse order. Would it be worth it for everyone to pay a higher price (loss) for those producers to extract a higher rent, er, price (gain)? Worse bills of goods have been sold to happy voters.

What, then, is the rationale for partitioning economic gains and losses with international borders while simultaneously seeking to enforce non-economic “rights” across and in spite of those same borders? A ha! The first error is an assumption of rationale!