There is no doubt that foreign trade will play a significant role in this year's U.S. presidential election.
In one way or another, the major candidates have opposed pending trade agreements, like the Trans Pacific Partnership (TPP), and others, and against exiting trade agreements, like NAFTA.
Republican nominee Donald Trump has particularly played to voters' anxieties about the loss of companies and jobs due to foreign competition that benefits from these agreements. Such thinking holds that trade agreements work against the best interests of the country and that the U.S. should assume a more isolationist posture.
But such attitudes are wrong. They reflect a fundamental misunderstanding of global economic trends, including the technology and financial services industries. The world economy will thrive from the sort of freer trade that boosts productivity and creates jobs.
Wall Street Journal columnist Mary Anastasia O'Grady argued that technological advances are the major reason for the loss of most middle-class jobs. She wrote that industries that are most impacted by foreign trade rely on technological advances, and that "middle-class" families impacted have "made financial sacrifices to prepare them to compete in the modern workforce."
Ms. O'Grady also argued that "it is 'high-education' and 'low-education' jobs that are the most difficult to automate." "Human capital investment must be at the heart of any long-term strategy for producing skills that are complemented by rather than substituted for by technological change."
It is workers in jobs requiring little education that are having the greatest difficulty in adjusting to current economic conditions, and that are, therefore, most anxious.
The spread of information is the primary force behind the changes that are occurring globally -- changes that are reflected in the continuing expansion of global trade, the movement of people, and the spread of financial innovation and financial markets.
Consider the fallout from the British vote to leave the European Union. Some Brexit observers have have asked what will happen to British FinTech workers. London has some of the world's most vibrant FinTech activity.
FinTech combines two of the world's most important growth areas and shows how the spread of information is dominated by jobs requiring high education levels. It also highlights the income inequality of the past, roughly half century -- an inequality that has spurred anxiety and resentment from those whose income has not increased.
The growth of information technology and financial services has been astounding. These industries have created more wealth and jobs at a faster rate than manufacturing and other industries
Both sectors also require greater amounts of education, and as Ms. O'Grady writes, require "interpersonal interactions, flexibility, adaptability and problem solving" skills.
The environment of the financial sector has also distorted the performance of the economy as more of a country's resources go into the financial than the industrial sector.
Investors, including institutional investors, have relied increasingly on new financial innovations to earn higher returns. That has required the companies to hire individuals with higher levels of training and more advanced degrees.
In the past decade or so, a smaller amount of credit went into physical investment and larger amounts went into finance, some creating asset bubbles. One of the reasons the economy is not growing fast is that few funds are going into net business investment.
The rewards went to the wealthy or to the well-educated that got into these financial opportunities. The middle-classes and the lower-classes did not participate in these. And, the financial opportunities spread globally.
Finance is nothing more than information and information processing, nothing more than 0s and1s. Hence, if information, in general, is expected to continue to spread globally, one could argue that finance will also continue to spread globally.
In other words, we need to work with this expansion, not fight against it by drawing back from the rest of the world and by building walls to protect ourselves.