Clear and Present Danger

   Politics and economics are so closely intertwined that it's hard for experts in one field to avoid commenting on the other.
   When political candidates promise to close borders, increase protectionism, impose punitive tariffs and otherwise punish international trade nations, it's time for economists to speak up and warn of the dangers in such tactics, which lead to one country being stranded on an economic island of its own making.
   That happened today, as the managing director of the International Monetary Fund (IMF) spoke out against the "growing risk" of politicians seeking office and promising "get tough" policies on international trade.
   "History tells us that closing borders or increasing protectionism is not the way to go," said Christine Lagarde during a speech in Toronto.
   She mentioned no names in her criticism of those who would enact such measures as a way to domestic prosperity. Instead, she emphasized that "global economic integration" has long been recognized as the key to prosperity for all sides.
   There's nothing new here. As long ago as 1776, when Adam Smith published his founding volume, "The Wealth of Nations," mutual trade has been endorsed by economists, philosophers and human rights activists.
   Lagarde cited the Canadian philosopher Marshall McLuhan's comment that technology had brought the world to be a "global village." Amartya Sen, the Nobel laureate in economics, noted that global economic integration "has enriched the world scientifically and culturally, and benefited many people economically as well," Lagarde said. And she quoted Martin Luther King as saying that "Whatever affects one directly, affects all indirectly."
   Success will not be easy, however, and solutions will be hard to put in place, given differences in ethnic and cultural factors, Lagarde said.
   Even so, there are some policy tools that can help. Lagarde urged more education and training for lower-skilled workers; stronger social safety nets including a higher minimum wage, health benefits, and unemployment insurance; more economic fairness to reduce tax evasion and the artificial shifting of business to low-tax locations; as well as more global cooperation among trading nations to boost welfare for all.

   Will it happen soon? No, but "the ability of countries to rise above narrow self-interest has brought unprecedented economic progress" in the 70 years since the IMF was formed.
   The isolationist policies of the 1930s that contributed to and worsened the Great Depression are currently being resurrected by some political candidates, in Europe as well as in the U.S.
   The danger is clear.