Adam Ozimek -- blogger at Modeled Behavior and associate at Econsult Corporation
In reading the sometimes polarized debate in the economics blogosphere, the discipline often appears to suffer from an excess of disagreement and uncertainty. But this is more about the incentives economists face when writing and speaking in the public sphere than the actual state of knowledge in the field. In reality economists agree about a lot of things, and in many cases they do so with a high degree of certainty.
This fact is on display frequently at the IGM Economic Experts Panel from the University of Chicago. This is a panel of 41 of the worlds top economists who are offered statements about economic policy to which they can indicate whether they agree, disagree, or are uncertain. In addition they rate the certainty of their answer on a scale of 1 to 10, which allows the answers to be weighted. Over the past few months there have been several issues where this ideologically diverse group of economists have shown resounding unanimity. Some of these may surprise people, as it's fairly obvious that public opinion would not side with economists with the same amount of unanimity. So here are a few things economists strongly agree on.
The benefits of free trade and NAFTA far outweigh the costs
None of the economists surveyed disagreed that the gains to freer trade are much larger than any costs. And only two economists even said that the answer is uncertain. In a space for additional comments, MIT's Richard Schmalensee declared "If that's not right, almost all of economics is wrong".
Economists have emphasized the benefits of free trade for a long time, reflecting the field's belief in the importance of specialization, comparative advantage, and gains from trade. Indeed, these results are similar to other surveys that show economists strongly supporting free trade.
So why do pundits and voters lag economists in supporting free trade? In his excellent book The Myth of the Rational Voter, Bryan Caplan provides evidence that people suffer from a handful of systematic biases that influence their beliefs, and three of these can help explain why voters are skeptical of trade: anti-market bias, anti-foreign bias, and pessimism bias.
Paul Krugman provides three reasons why intellectuals in particular resist the theory of comparative advantage that underpins free trade: 1) opposition to free trade is intellectually fashionable, 2) comparative advantage is hard to understand, and 3) they are averse to a fundamentally mathematical understanding of the world.
As is reflected in the comments by some of the panelists trade will create winners and losers, which may also explain some opposition to trade. But economists on the left and the right still struggle the understand the level of opposition to trade, and the rejection of the overall gains. Whatever their reasons for resisting, people should follow economists lead and embrace the fact that the gains from freer trade outweigh the costs.