Robert Skidelsky warns liberals, who champion free trade, against assailing Trumpian protectionism, “until they have something better to offer.” He points out how companies in developed countries change people’s minds about the “gains from trade,” if their jobs are being allocated elsewhere. In the end there are “no longer guaranteed ‘gains,’ even in the long run, to those countries that export technology and jobs.”

The author warns liberals, who view free trade in goods and services and free movement of capital and labour as “integrally linked to liberal politics,” fearing there is nothing that would “more likely to destroy liberal politics than inflexible hostility to trade protection.” The rise of populism and illiberal democracy in the West is, after all, “the direct result of the losses suffered by Western workers (absolutely and relatively) as a result of the relentless pursuit of globalization.”

Trade is an activity of buying and selling between countries. It’s logical that if a country cannot produce a good, because “natural resources are not equally distributed round the world,” it seeks to import it. In this context the author casts light on the two concepts in international trade – absolute advantage and comperative advantage – that define the “main motive” for trade and the basic economic benefits that countries get from one another.

Foodstuff is the perfect example to illustrate the concept of absolute advantage – the differentiation between the varying abilities of countries to produce goods efficiently. It is not economically feasible for a country to import all of the food needed to sustain its population, as the types of food a country produces can largely be affected by the climate, topography and politics of the region. Spain is better at producing fruit than Iceland. The Nordic island nation specialises in marine products, for which its resources are best suited.

Given limited resources, a country's choice to specialise in the production of a particular good is also largely influenced by its comparative advantage. Whereas absolute advantage refers to the superior production capabilities of one nation versus another, comparative advantage is based on the concept of opportunity cost. If the cost of choosing to produce a particular good is lower for one nation than for others, then that nation is said to have a comparative advantage.

The author says the “scientific case for free trade rests on David Ricardo’s far more subtle, counter-intuitive doctrine of comparative advantage. Countries with no coal deposits obviously cannot produce coal. But assuming that some production of a naturally disadvantaged good (like wine in Scotland) is possible,” then raises the question about the cost. Even if “comparative advantage” could widen “the potential scope of beneficial trade,” would consumers be ready to pay more for a domestic good produced at unreasonable cost?

Ricardo (1772-1823) “demonstrated that total welfare is increased if countries with absolute disadvantages specialize in producing goods in which they are least disadvantaged.” Such an agenda has less chance to survive in a liberal democracy than in an authoritarian country that is ruled by leaders with no term limits. In the West a democratic process like election upends a government’s tenure, disrupting policies that take years or a decade to implement.

The author doubts the belief that “free trade would allocate resources more efficiently and raise productivity” and boost sustainable growth. According to Ricardo, “land, capital, and labor – what economists call the ‘factors of production’ – were intrinsic to a country and could not be moved round the world like actual commodities.” The English political economist was against prosperity at all cost, opposing men who left their country just to earn more overseas, while adapting themselves to “a strange government and new laws.”

Thomas Palley sees “reallocation of production abroad” in our globalised economy as “barge economics.” It describes factories floating between countries “to take advantage of lower costs,” supported by a “legal and policy infrastructure,” which aids “multinational corporations to weaken domestic labor and boost profits.”

Paul Samuelson maintains “if countries like China combine Western technology with lower labor costs, trade with them will depress Western wages.” Even if consumers in the West “have cheaper goods, but being able to purchase groceries 20% cheaper at Wal-Mart does not necessarily make up for wage losses.”

In the last two decades, “China’s share of global manufacturing exports increased from 2.3% to 18.8%. Some categories of American manufacturing production were wiped out.” The US, as the authors believe, would gain “eventually.” But the gains might take “decades” to be realised, and would not be equally shared.

Even if “the losses that come with globalization“ outweigh protectionism, they are a hard sell. “But what is their alternative?” The author says the “favored remedies are somehow to slow down globalization, giving labor time to re-skill or move to more productive activities. But this is scant comfort to those stuck in the rust belts or decanted into low-productivity, low-paid jobs.” It takes two to tango – the government needs to invest in the human capital of its citizens, who also must make an effort – to be flexible and adapt themselves to known and unknown challenges in the labour market.