NDP MP Pat Martin, 'economic treason' and anti-foreign bias

Stephen Gordon on a misguided belief as old as the world

(Adrian Wyld/CP)

The conflict among nations that so many policy intellectuals imagine prevails is an illusion; but it is an illusion that can destroy the reality of mutual gains from trade. (Paul Krugman)

In The Myth of the Rational Voter, Bryan Caplan argues that the most important obstacles to implementing sound economic policies are not lobby groups or the ability of other special interests to influence politicians, but certain systemic, irrational beliefs of the electorate. This is hardly an encouraging conclusion, but if we needed any more evidence for at least one aspect of his thesis, the CNOOC-Nexen takeover is providing it.

One of the prejudices identified by Caplan is what he calls anti-foreign bias: “a tendency to underestimate the economic benefits of interaction with foreigners.” According to popular (mis)perception, dealing with foreigners is to be mistrusted: if they want something from us, then they must perceive some benefit from the exchange. And if foreigners are gaining, then Canadians must be losing.

This is nonsense, of course: the gains from trade are not zero-sum. But once you’re locked into anti-foreign bias, a Canadian who sees nothing wrong when foreigners benefit from trade is the same thing as a Canadian who wants Canadians to lose from trade. And so words such as “disloyal” (apparently a favourite epithet among those opposing reciprocity in 1911), “betrayal”, “traitor” and “treason” tend to get thrown around like so much confetti. NDP MP Pat Martin’s accusation of “economic treason” on the part of those who don’t see why the government should forbid a freely negotiated exchange of an asset is simply the latest in a long line of similarly overblown rhetoric.

Now, blocking the deal might well prove popular: anti-foreign bias is widespread, and understanding why it’s wrong sometimes requires a significant intellectual investment. It’s hard to shake the notion that another country’s gain must be Canada’s loss.