How evolutionary psychology explains opposition to trade

We evolved in a world of zero-sum competition between individuals and groups. In the absence of a developed market economy, outsiders could only benefit from your tribe at the expense of your tribe.

Written by: Richard Hanania

Compiled by: Block unicorn

The American right is keen on restoring manufacturing jobs. Long before Donald Trump's "Day of Liberation" tariffs, free trade was blamed for a series of issues ranging from children no longer playing outside to national weakness and America's strategic disadvantage compared to China.

However, these viewpoints are hardly supported by empirical data, and the ethical arguments behind trade protectionism are varied, ranging from inadequate to utterly absurd. Despite the overwhelming consensus of common sense and economists, the unfounded arguments against trade still persist, indicating that we need to understand that the desire to protect manufacturing jobs from foreign competition is rooted in evolutionary psychology. Trade protectionism is a preference that manifests at the intersection of two very strong emotions: hostility towards foreign groups and an aesthetic preference for jobs that produce tangible goods.

Chris Caldwell recently criticized trade, arguing that the concept of "the nation as a whole" is entirely fictional. "The same policy may be seen as a windfall by one group of people, while being viewed as a disaster by another group. Trade makes you an ally of certain foreigners, but also positions you as an opponent of some fellow Americans." Similarly, in "Conservatism: A Rediscovery," Yoram Hazony points out that free trade makes workers feel betrayed by government and business leaders, thereby "undermining the bonds of mutual loyalty."

These arguments are difficult to justify after careful consideration. Regarding Caldwell's point that trade puts you on the same side as foreigners against Americans, one might ask: doesn't restricting trade produce the same effect? If I want to buy a component from a Chinese manufacturer at a cheaper price, and domestic trade protectionists prevent me from doing so, isn't that obstructing my goal? Caldwell's view treats a world without cross-border trade as a natural default state, suggesting that the flow of goods across borders "creates" a situation of Americans opposing each other. In fact, a world without trade can only be achieved through strong government measures, requiring the state to intervene and take sides with some Americans against others.

Hazony's argument also presents a strange ethical perspective. When members of a group make sacrifices, it is usually to help the whole. For example, a soldier may sacrifice himself in war to protect the nation from being conquered. However, the "moral" argument against trade reverses this notion. The welfare of the majority and the whole must be sacrificed for the few.

Even if we accept the necessity of redistribution, this argument only holds if the pro-trade position involves a transfer from the poor to the rich. Those who have a lot may sacrifice to help the poorest among us. The problem with this viewpoint is that tariffs, as a regressive tax, particularly affect goods that take up a larger share of low-income households' budgets (such as clothing, food, and appliances). A 25% tariff on imported washing machines will raise prices for everyone, but the burden on minimum-wage families is much greater than on wealthy families. Research found that Trump's tariffs in 2018 cost each household an additional $419 per year. High-income earners may not notice such costs, but it significantly impacts the disposable income of low-income workers.

Although protectionists focus on the jobs saved by their policies, they overlook the greater harm done to other parts of society. The steel tariffs implemented by the Bush administration in 2002-2003 were found to have caused a loss of 168,000 jobs in industries that used steel as an input, exceeding the total employment in the steel industry itself. The tariffs on washing machines during Trump's first administration created 1,800 jobs, but the loss to consumers for each job was as high as $820,000.

Given the nature of the U.S. economy, none of this is surprising. Protectionists seem to believe that manufacturing constitutes a large portion of the national workforce. However, only 8% of the non-farm workforce is employed in manufacturing, far below half of what it was in the early 1990s. Even when focusing on those with lower levels of education, such jobs are far from the majority. As of 2015, only 16% of men without a bachelor's degree were engaged in manufacturing, down from 37% in 1960. Therefore, even disregarding women and all those with higher education, the majority of people are actually not obtaining the kind of jobs that free trade opponents are trying to protect and nurture.

So, what exactly is the basis of national policy? Should it come at the expense of everyone else's interests to help a very small number of the public, or even a very small number of the working class? The strange thing about anti-trade conservatives is that they rarely focus on the other sacrifices that the wealthy can make for the poor. For them, the most straightforward approach is to call for higher taxes on the rich and strengthen redistribution. This way, they can focus on those who are most able to pay, rather than taxing everyone (which would have a disproportionate impact on the poor) to help a very small number of people. I am not advocating for redistribution, but I want to say that if this is your goal, then restricting trade is not the way to achieve it.

Given that empirical data overwhelmingly demonstrates the impact of tariffs, and considering the existing structure of the American economy, many people's strong attachment to protectionist policies must have psychological reasons. Evolutionary psychology provides the answer. First, we evolved in a world of zero-sum competition between individuals and groups. In the absence of a developed market economy, outsiders can only benefit at the expense of your tribe.

President Trump has clearly expressed this viewpoint, stating that trade deficits mean we are "losing" money to foreign countries. This is, of course, nonsensical. I buy things in stores because both parties believe that voluntary trade is in their own interest. It is worth noting that conservative intellectuals, as well as the broader American public, rarely hold such strong views in economic areas outside of trade and immigration. According to Trump's worldview, isn't every scenario with a buyer and a seller some sort of scam? Very few people understand economics in this way, which suggests that the involvement of foreigners changes people's perceptions of interactions.

In addition to zero-sum thinking, another relevant aspect of evolutionary psychology is how we perceive the nature of work. As mentioned earlier, protectionists tend to overestimate the value of manufacturing jobs while also overestimating our economy's dependence on these jobs. But why is it seen as a loss when a person transitions from factory work to becoming a barber or a ride-hailing driver, even if the new job may pay better? Why do American protectionists seem to envy countries like China and Vietnam, which have a higher proportion of their workforce engaged in manufacturing, yet are far poorer than we are?

The answer must again be traced back to the distant past and how it has shaped our contemporary brains. As hunter-gatherers and later farmers, we can see that those who built houses or made fishing spears clearly contributed to society. Manufacturing workers are the modern equivalent, producing goods that people can see and touch.

The rise of the service economy is a recent phenomenon. For most of human history, almost all labor was related to survival—hunting, gathering, agriculture, or tool making. Even during the early industrial period, most workers were involved in making things. However, over the past century, developed economies have undergone significant changes. Today, the vast majority of workers in countries like the United States are engaged in the service sector, including healthcare, education, finance, hospitality, and software development. The productivity of these roles is often abstract, making their social value harder for most people to understand.

It is worth noting that, similar to manufacturing, agriculture is often romanticized and protected, possibly because it has a pre-modern counterpart. Like factories, farms evoke images of hard physical labor, subsistence, and independence. This aesthetic preference for such work is deeply rooted in our collective psyche. However, the structure of modern work has changed. Manufacturing and agriculture account for only a small part of the economy in developed countries.

Today, most Americans do not produce physical goods. They provide care, solve problems, create knowledge, or facilitate transactions. These jobs are as real and valuable as factory work, but lack the intuitive, visible outputs that our brains are conditioned to value. Therefore, nostalgia for manufacturing is not based on economic logic or ethical clarity, but rather an instinctive bias towards the forms of labor our ancestors engaged in.

Of course, emotions are important in politics. However, it is crucial to recognize when we are driven by psychological illusions. One might argue that the path to happiness is to indulge our natural instincts, establishing a closed economy that enables more people to produce tangible things, even if this leads to a collapse in our living standards. However, protectionists almost never present such reasoning — and there is good reason for that. Once you understand the nature of these biases and their irrationality, the arguments against trade become untenable.

This is why protectionists argue that their policies will economically benefit the nation, or at least shift wealth from the rich to the poor. The correct response is that their assumptions are fundamentally incorrect. Instead of setting up trade barriers or trying to revive long-gone employment landscapes, we should consider how best to support current workers, rather than the workers we imagine. This means supporting a flexible labor market, higher quality training and education, and eliminating unreasonable barriers to earning a living, such as occupational licensing systems.