The impact of free trade

Professor Perry shows a graph of U.S. Exports and Imports of Food vs. Food Share of Disposable Income 1969 to 2009. It indicates that the food share of disposable income has dropped from about 14% to under 10% in the 40 years graphed. During that time, the value of exports and imports has increased from a few billion to more than eighty with exports generally surpassing imports.

The graph was presented as a counter to some of the doom and gloom about U.S. decline that seems popular in some circles. The reality is a significant contrast to what these people insist exist.

In fact, we typically export more food than we import in most years, and have run trade surpluses for food in 2007, 2008 and 2009. And we have always imported billions of dollars of food each year (think bananas, coffee), see chart above. Partly as a result of increasing international trade, food is more affordable than any time in U.S. history, when measured as a share of disposable income (see chart). Free trade has not failed the U.S., it has contributed to a rising standard of living for all Americans, and the increasing affordability of food is just small part of the story.

What really is amazing is what some folks do to attempt to disqualify, discredit, or otherwise impugn measures such as Perry shows. It is enough to make one wonder why they are so invested in doom and gloom.

Comments are closed.