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Economists, whose discipline has always had a strong relationship to moral philosophy (Adam Smith, the author of The Wealth of Nations, also wrote the celebrated Theory of Moral Sentiments), have always seen their role in society as that of pursuing the public good. They properly see themselves as guardians of the public interest, and to be engaged in public-policy debates against special interests who wish to ‘capture’ policy to advance their narrowly circumscribed, self-serving agendas.

I must note at the outset that as one analyzes the public debates on questions of economic policy, one sees cynical attempts by special interests to gain the higher ground. One might observe wryly that in the battle for public support, one tries to gain the advantage by claiming that the opponent’s interest is ‘special’ and one’s own is ‘general.’ We have long known that special interests have learned their Orwell well: they understand that words matter in public debates.

Thus, protectionists have typically used the inviting phrase ‘fair trade’ to mask their protectionism.1 This was true at the end of the nineteenth century when Britain, the long-standing proponent of free trade, was facing the rise of Germany and the United States. As Britain experienced what I have called ‘diminished giant syndrome,’ ‘fair trade’ became a cry of the protectionists, who charged these newly emerged and protectionist trading nations with ‘unfair trade’ and condemned Britain’s free-trade policy as inappropriate. The United States would confront the same syndrome a century later, with the dramatic rise of Japan in the 1980s and the dreaded prospect that the twenty-first century would be Japan’s as the twentieth was America’s and the nineteenth was Britain’s. Exactly as in Britain at the end of the nineteenth century, the United States witnessed the growth of demands for ‘fair trade,’ and charges against Japan that it was a wicked ‘unfair trader’ that excluded imports and dumped its exports.

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