The spin continues following Council of Economic Advisers Chairman Gregory Mankiw's statement that the form of trade known as "outsourcing" is, in fact, positive for the economy.

Though ideally Mankiw would have delivered his message in a way less susceptible to spin, his argument is the same that was put forth two centuries ago by the great economist Adam Smith and the almost-as-great David Ricardo. If a country cannot produce a good (or service) as efficiently as another, it should buy that good (or service) and use its scarce resources to produce the goods and services that it produces most efficiently. The ensuing trade leaves both countries better off, as, in the absence of government intervention, resources are allocated towards their most efficient use.

Still, though the merits of free trade have been proven true time and time again over the years, it seems that on every occasion an industry that can no longer compete on its own finds itself in trouble, Chicken Little appears to tell us that the sky is falling - and so will the economy unless the government takes action.

Yes, free trade will cost jobs in industries that cannot, whether by lack of productivity, inflated salaries, or overregulation, compete with those abroad. This sounds callous, in today's climate where textile-manufacturing jobs in South Carolina or information technology jobs in California are sent to Latin America or India. Many would argue that these industries need protection to save the jobs of workers. However, would it have made sense to use government coercion to protect the candle-making industry after the invention of the light bulb? Or to save the jobs of record-player repairmen after compact discs arrived?

The fact is that not only does restriction of trade cause damage to the long-term economic well-being of society, it also does incredible damage in the short term. Economist Todd Bucholz points out that when Japanese automakers began "voluntarily" restricting exports to the United States during the 1980s, prices of all cars rose dramatically, giving American consumers less to spend on other goods and reducing jobs in other sectors.

Imagine this loss of production on an immense scale, and you have what has been done to our economy by protectionists over the years.

Whether it is the restriction of trade in manufactured goods or technology services, government action to coerce markets invariably leads to one result - lower standards of living for everyone.

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Tim G.W. Holbert, a graduate of Miami University and a former Loveland resident, is program director of the American Studies Center in Washington, D.C.

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