While economists in general are trained to evaluate all arguments sceptically, there is one big exception – Free Trade. Most economists are wedded to the idea of free trade to the point that many will routinely reject the results of mainstream economic analysis in favour of logically incoherent claims about dynamic effects, ‘cold showers’ and so on.
For a variety of reasons, I apostasised from the free-trade religion early on and, for a while, became an outright protectionist in reaction. Now, I don’t have a preconceived position either way, and try to assess the issues on their merits.
One point that comes out of any neoclassical economic analysis is that, at tariff rates below around 10 per cent, the (traditional trade-theoretic) benefits associated with a reduction to zero are trivially small. This is because the welfare loss associated with a tax are proportional to the square of the tax rate, and the square of 0.1 is 0.01 (1 per cent).
Over at Club Troppo, Nick Gruen makes this point, among others, and sets off something of a firestorm. Read, enjoy and comment either there or here as you please.