Donald Trump at Aston, PA September 13th, by Michael Vadon, under a CC-BY-2.0 licence
Many things have been said during this presidential campaign and many talked about the bad things we should expect from each candidate, especially Donald Trump. But I will talk about economics – just one thing that was pushed hard by Trump: trade.
America is a big country, the biggest economy in the world and technologically the most advanced. Many countries, including the UK and Europe benefit a lot from the openness that America has espoused in recent decades. America benefits too. The Obama administration has pushed through trade agreements with nations well beyond its borders. Agreements with nations on the other side of the oceans are actively being negotiated. If these come to fruition they will be good for everyone. Especially for Asia, but for us too.
Trump rubbished them as “American job destroyers” and promised to block them. Clinton expressed serious reservations too. Of course, they were both trying to win the votes of the workers who lose their jobs when foreign countries can produce more cheaply the same things that they do. The right response would have been “it’s good for us and we will make sure the workers who lose their jobs will get help from the government to find better jobs”.
But it was not. Instead it was, “keep the foreigners out to protect American jobs”. A more enlightened president, John F Kennedy, once said, a country that has the intelligence to discover technologies that destroy jobs also has the intelligence to find new jobs for its workers. But not the candidates in this election. An isolationist America will be bad for the world. Europe has to impress on the Americans that as the world technological leader it can benefit enormously from free international trade and it can make the rest of the world a better place to live in.
- This post gives the views of the authors, not the position of LSE Business Review or the London School of Economics.
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Christopher Pissarides is the Regius Professor of Economics at the London School of Economics, a Professor of European Studies at the University of Cyprus and Chairman of the Council of National Economy of the Republic of Cyprus, and the Helmut & Anna Pao Sohmen Professor-at-Large of the Hong Kong University of Science and Technology. He was educated at the University of Essex and the London School of Economics (LSE), and he spent the bulk of his career at the LSE. He had long visits in the US Universities of Harvard, Princeton and California at Berkeley. Sir Christopher specialises in the economics of labour markets, macroeconomic policy, economic growth and structural change. He was awarded the 2010 Nobel Prize in Economics, jointly with Dale Mortensen of Northwestern University and Peter Diamond of MIT, for his work in the economics of markets with frictions. Prior to that, in 2005, he became the first European economist to win the IZA Prize in Labor Economics, sharing it again with his collaborator Dale Mortensen.