August 21, 2007
Letter in the WSJ

This letter from yours truly appears in today's WSJ:

Mr. Peter Navarro claims that 1,028 economists (including me) who oppose protectionist legislation against China ignore China's "extremely lax environmental and health and safety regulations that encourage the rest of the world to export their pollution and sweatshops to China via offshoring."

This argument is a red herring. Research on the environment and globalization by Jeffrey Frankel of Harvard's Kennedy School of Government finds, "little statistical evidence, on average across countries, that openness to international trade undermines national attempts at environmental regulation through a race to the bottom effect. If anything, favorable gains from trade effects dominate on average, for measures of air pollution such as SO2 concentrations."

E. Frank Stephenson
Chairman, Department of Economics
Berry College
Mount Berry, GA

The Frankel quote is from the abstract of this paper; he (and Andrew Rose) have a similar paper here.

In a related vein, "The Informed Reader" feature in yesterday's WSJ summarized a Boston Globe article "Old Equipment Gets New Chance to Pollute." Apparently poor countries are buying used industrial equipment from the U.S. instead of more modern, cleaner, technology. While this would seem to cut against my letter, the article points out that used equipment "is more efficient than the even-more-antiquated machinery it replaces."

Finally, it'll come as no surprise that Don Boudreaux also responds to Navarro in today's WSJ. I'll add a link if he posts his letter on Cafe Hayek.

ADDENDUM: Don has now posted his letter. I suggested one minor improvement to him, changing his last sentence to read "... it is Mr. Navarro who spreads beggar-thyself fallacies."

Posted by E. Frank Stephenson at 08:31 AM in Economics

The statesman who should attempt to direct private people in what manner they ought to employ their capitals would not only load himself with a most unnecessary attention, but assume an authority which could safely be trusted, not only to no single person, but to no council or senate whatever, and which would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it. -Adam Smith

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