Question. Read Douglas Irwin, Free Trade Under Fire, fifth edition (introduction & chapters 1– 4) and other required readings and answer the questions that Irwin tries to answer in his book: What’s so good about trade, why do governments restrict trade, and why is trade policy so controversial? What is Irwin’s answers and arguments? Assess his arguments and make your arguments answering these questions. Be sure to offer concrete examples and illustrations to support your arguments wherever possible, referring to course materials such as the readings, and the film assigned. In other words, you must make and support your argument with logical explanation and empirical evidence referring to Free Trade Under Fire and other course materials including the required readings other than the book.
There are many ways you can answer this question, but no matter how you answer it, your discussion at least needs to include the following points:
1. What is comparative advantage? Why do countries trade what they trade? Discuss by referring to Irwin, chapter 2.
2. Contrary to the economists’ conclusion that free trade is good for all countries all the time, Krasner argues that states will not embrace free trade all of the time and that the international trading system will be open only under particular conditions. What is the reason for this discrepancy? Which argument (economists vs. Krasner) do you find more convincing, and why? Discuss the hegemonic stability theory by referring to Krasner.
3. After reading Milner’s and Krasner’s articles: To what extent is the openness of the world trading system best explained by international vs. domestic factors? What are the main pieces of evidence to support each argument? Are these arguments contradictory and can they be used to complement one another? Find supporting evidence from the historical discussions by Schonhardt-Bailey and Bailey/Goldstein/Weingast.
4. Rogowski and Davis both join Milner for arguing that states will not embrace free trade all of the time due to each state’s domestic politics. Explain the domestic political economy of trade protectionism, referring to Rogowski’s and Davis’s articles. Also, explain the difference between Milner’s and Rogowski’s arguments by referring to the Ricardo-Viner model (Milner) and the Stolper-Samuelson theorem (Rogowski). Refer to Irwin, chapters 3–4 as needed.
5. According to McDonald, how does capitalism brings peace? According to the normative arguments introduced by Hirschman, how does capitalism bring peace?
