For the past few weeks, I have been playing with the following argument. Tell me what you think:
In the past year, fuelled by Trump’s fiery rhetoric as well as the left, a lot has been said against trade, especially framing it as the cause for the decrease of manufacturing jobs in the United States or Canada. But the truth is, trade played a much lesser role than decades of efficiency gains due to automation and information technologies. Although most of us do not realize that fact, the US has never produced as much industrial goods as they do now, with the big difference being that they produce all of it with less workers than before.
Let us consider the following abstract case:
- 20 years ago, 200 workers built 200 tractors.
- Now, because of efficiency gains, 150 workers are able to build 210 tractors, while the other 50 workers are fired.