Interpretation Matrix: Free Trade Benefits Everyone

Anyone who’ve read this blog before is bound to have noticed me go on and on about how unclear meanings of words cause trouble. We use words in extended and partial senses all the time, so they tend to develop multiple and partially overlapping meanings. A lot of dysfunctional[1] disagreement comes from a word having a narrow and a broad interpretation, and people picking one of them as the One True Meaning, which one largely depending on what suits their case (we don’t necessarily notice it when we do this).

I’ve also talked about how many of our beliefs and attitudes are of “low resolution”. We often believe (or endorse) not detailed empirical claims but vague generalizations, and support or oppose broad concepts rather than detailed policy proposals. You could argue that these abstracted beliefs and attitudes are approximations of more detailed versions, but I don’t actually think this is true. It’s often the beliefs/attitudes themselves that have low resolution and when asked for details we don’t so much retrieve them as construct them on demand (and we don’t necessarily notice that we do this).

Taken together, this means there’s a lot of room for frustrating confusion and rhetorical trickery when we’re hashing out whether we should or shouldn’t believe/support this or that idea. We’re often trying to decide something without a correct answer, because the truth values of claims are ill-defined when they have many interpretations whose truth values differ.

This gives us phenomena like the Motte and Bailey maneuver where a modest, well supported version of a belief provides cover for a bold, not so well supported version under the same label or phrase.

It can be difficult enough when we’re disagreeing about a single word, but at least then we can list the possible meanings and get some sort of clarity. But if there are more than one ambiguous term, and especially if the truth value of the resulting claim depends on not just the meaning of each but the meaning of both combined, it gets messy. In that case we need to list interpretations of each term on their own axis and get a matrix of possible meanings — an interpretation matrix.

I almost did this before. In Science, the Constructionists and Reality I looked at the phrase “reality is socially constructed” and argued that both “reality” and “constructed” were ambiguous in a way that was partly at fault for the animosity between scientists and social constructionists that raged in the 90s and whose aftershocks are still felt. Splitting them each into two meanings gave four possible interpretations, but that time I could get my point across by using just two. Sometimes you can’t do that. Sometimes you need to set up the matrix.

Free trade benefits everyone

I’ve had some education in economics. I’ve also had experience with people disagreeing about the merits of free trade when trying to make sense of globalization and its effects, and to me there’s a lot of talking past each other. Resistance to free trade, global markets, outsourcing etc. from people who’ve lost their jobs or is facing a less generous job market in general is often — this is my impression, at least — dismissed as not just selfish but irrational. Free trade benefits everyone, you know. Economists have shown this and only an ignorant rube would disagree.

There’s a sleight of hand involved. An unusually subtle motte-and-bailey, if you will. Setting up an interpretation matrix will show how it works. Look at the phrase again: free trade benefits everyone. Right now I’m not even going to touch the complexities of what exactly “free trade” means, but you know — free movement of goods, money and labor, that kind of stuff.  I’ll just look at “benefit” and “everyone”. Seems simple, right? Heh.

When we say “X benefits Y” do we mean that X makes Y better off on net, counting total costs as well? Or does it mean that X produces some identifiable benefit for Y, that may or may not be greater than the costs? In international free trade terms, if you lose your job because your widget factory closes and moves to China where they can make the widgets at lower cost it benefits you in the sense that you get part of the spoils: you can buy cheaper widgets. But it’s unlikely to be a net benefit, considering that you lost your job and all[2].

So that’s two meanings of “benefit”[3]. What about “everyone”? I think back to the way one of my course mates phrased their summary of international trade in an introductory economics class: “the benefit from trade is greater than the loss, meaning that in theory the winners could compensate the losers in full and still be better off than before — that this doesn’t actually happen is of course another matter“. (Emphasis mine).

When we say “everyone” we might mean every single person, individually. “I’ll give everyone an apple” means every person gets an apple of their own. But it can also mean — and in the case for free trade made by Microeconomics 101 it does — the group “everyone”, in total. An apple given to the group “everyone” to share also matches the phrase.

With two options for each word we can put together a 2-by-2 matrix:

matrix1Each quadrant has its own distinct meaning. The bottom left is such a weak claim that it’s irrelevant (and almost incoherent). All it really says is that free trade does, among other things, have some positive consequence for somebody. It isn’t actually used. The other three are where the interesting stuff happens.

matrix2The top left quadrant is the standard textbook line: the total gain is greater than the total cost. This is true (at least in a narrow economic sense). That by itself, however, isn’t all that strong of a justification. It’s easy to think “oh jeez, you mean to tell me that me losing my job is fine because my boss and the shareholders gained more than I lost? Imagine my joy.”[4] That’s where the bottom right comes in. It says that every single person gets some benefit from free trade (e.g. everyone can buy their widgets at a lower price).

So top left and bottom right share a phrase but are different claims. They’re both true, which has an interesting effect: since one interpretation of “benefit” in the meaning of “net benefit” and one interpretation of “everyone” in the meaning “every single person” are true, it’s easy to get the impression — if we’re not thinking particularly carefully — that the combination of both is true as well.

matrix3That one, the top right one, isn’t true. Not without looking at a longer time horizon and making some non-obvious and highly optimistic assumptions anyway. At the very least it’s a lot more questionable than its two neighbors are.

If it were true it would indeed mean that opposing free trade is irrational and ignorant. As it happens it isn’t but it’s still difficult to argue against since it requires pinning down the meaning of two slippery terms at once. If you leave either one unattended for a second it can be subtly altered to create a truth, leaving you with egg on your face. In a sense, the top left and bottom right claims act as a two-part distributed motte to the bailey that is the top right.matrix4

None of this is meant as an argument against free trade. It, and the general advancement of the great techno-institutional-economic machine of which it is part, has produced vast riches. It has lifted much of the world out of poverty and continues to do so as we speak. But there are losers[5] and they are not necessarily irrational for complaining, nor can their complaints be dismissed as ignorance. There are real issues that ought to be addressed.

I think making interpretation matrices can help us visualize disagreements and discussions like this one, when the two-part structure of the defender interpretations — the motte — is important for how it works.

We shouldn’t think that a given matrix contains all possible meanings of a phrase, though. This small 2-by-2 example is just a toy model and I glossed over a lot. When we have more than two ambiguous terms we can’t visualize it neatly, for one, because the matrix becomes three-dimensional or worse.

I also skipped over some possibilities; this was the best choice for the point I wanted to make but we could’ve had a much bigger matrix. My interpretations of “benefit” assumed that benefits were quantifiable and fungible (in effect economic) which isn’t necessarily true. There could’ve been multiple kinds of benefit or even multiple combinations of benefits meant. “Everyone” as “the group ‘everyone’ in total” can also be further subdivided into on the one hand, the simple sum of individual outcomes and on the other hand refer to some group-level properties that don’t straightforwardly translate to individual ones[6].

Still, I think small toy models are valuable if they introduce us to useful ways of thinking. Note also that while this is unsophisticated and blunt, most public discourse is in fact unsophisticated and blunt so we need different tools to make sense of it than we use to analyze well-posed philosophical and scientific questions.

 

• • •

 

Notes

[1]
The phrase “dysfunctional disagreement” can be contentious. I’ve defended my use of it here.

[2]
I’m deliberately excluding some stuff here. You could retrain and get a better job. Often that’s easier said than done though, and comes at a cost. And even so you’ll be facing a less generous job market in general.

[3]
I’d like to point out that this is exactly the same ambiguity that fuels the “privilege” discussion trainwreck: does being privileged mean to have some privilege that accrues to you, or does it mean ending up in a place of privilege once everything has been accounted for? For the concept to be at full rhetorical power it has to be able to combine the broadness of the first and the connotations of the second.

[4]
This does leave out other people who benefit too, like other consumers who get cheaper stuff and foreign workers who get better jobs than they had before. That isn’t likely to make the person feel much better though, possibly worse because acknowledging it makes the on-some-level-rewarding sense of righteous indignation harder to maintain.

[5]
At least in the short to medium term. It’s more likely benefits accrue to everyone over the long term, but there’s a lot of pain to be felt in the meantime. As John Maynard Keynes famously said in response to popular ideas about the economy working itself out in the long run: “In the long run we’re all dead”.

[6]
Maybe increased inequality (even when just the result of greater riches at the top) makes the group as a whole work worse in some way? I’m sure you could make some defensible argument of that sort. You could also think that the power and prestige a nation as a whole can command is in itself valuable.

4 thoughts on “Interpretation Matrix: Free Trade Benefits Everyone

  1. Nice toy example. It’s interesting to me how the free-market slogan ‘A rising tide lifts all boats’ fits into this dynamic. Water naturally has the redistribution property – it’ll work itself into all the corners, and settle into an equilibrium with a flat surface, instead of a complicated landscape of peaks and troughs. So thinking in terms of that analogy automatically pushes you towards the everyone’s-a-winner top quadrant, because that extra redistribution assumption has been sneaked in.

    Liked by 2 people

  2. I wholeheartedly agree with your point. I noticed this phenomenon when authors introduce their own definitions for common terms. If you want to understand their message, your only chance is to roll with it.

    You could always take on a fatalistic attitude and accept that discourse will always have to grapple with subjective definitions. But maybe the pressing question is: What does a better alternative look like? You could invent your own terms with their own precisely defined meaning, but that is unlikely to spread. You could demand more discipline in the way that words are used, but that is unlikely to happen (Exception: math and science community). You could introduce the definitions of the words you will use before making your statement, but that is cumbersome and hard to follow. None of these alternatives seem appealing to me. I think that our brains haven’t been made for well-defined discourse, nor has natural language. Maybe the best course of action is being aware of this issue and treating your discussion partner with respect and openness, in case the disagreement is caused by different definitions.

    I noticed that context is import. When considered on their own, statements such as “Free trade benefits everyone” may have different interpretations. But once you put them in a specific context, it is usually clear what is meant. For example, when talking to an economist, they are most likely going to talk about “net benefit for the group ‘everyone'”. Similarly, you can usually understand the meaning somebody is referring to by interacting with him for a while.

    Liked by 4 people

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