Naked Economics: Undressing the Dismal Science pdfdrive com

What economics can tell us about politics
M
any years ago I took a vacation with a group of friends. As the sole
academic among the bunch, I was the object of mild curiosity. When I explained
that I was studying public policy, one of my peers asked skeptically, “If people
know so much about public policy, then why is everything so messed up?” On
the one hand, the question was idiotic; it’s a bit like asking, “If we know so
much about medicine, why do people keep dying all the time?” One can always
come up with clever rejoinders a decade later. (At the time, I mumbled
something like “Well, it’s complicated.”) I might have pointed out that in the
realm of public policy, as in medicine, we have achieved some pretty good wins.
Americans are healthier, richer, better-educated, and less vulnerable to economic
booms and busts than at any time in our history—the 2008 financial crisis
notwithstanding.
Still, the question has stuck with me for years, in large part because it hints at
an important point: Even when economists reach consensus on policies that
would make us better off, those policies often run into a brick wall of political
opposition. International trade is a perfect example. I am not aware of a single
mainstream economist who believes that international trade is anything less than
crucial to the well-being of rich and poor countries alike. When the Booth
School of Business at the University of Chicago asked its expert panel of
economists whether “trade with China makes most Americans better off,” 100
percent of them—every single one—answered “agree” or “strongly agree”.
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There is just one small problem: It’s an issue that literally causes riots in the
street. When the World Trade Organization (WTO) held a conference in Seattle

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in 1999, some 40,000 protesters descended on the city, blockading streets and
smashing windows. Donald Trump was elected in part because of a backlash
against international trade, especially with China. Politicians in both parties are
often hostile to trade deals, even as economists extol the virtues of agreements
like the North American Free Trade Agreement (NAFTA) and the Trans-Pacific