Leibowitz on Trade: Virtue Signaling and Trade Policy—Trend or Fad?

I’ve noticed an increased focus on international issues reflecting moral and political subjects as opposed to economic ones, although these have been with us for a long time. Economists call this “virtue signaling.” The American Institute for Economic Research (AIER) published an article on the subject a few years ago, defining “virtue signaling” as “the expression of disgust or favor in an attempt to display one’s moral loftiness and superiority of those holding a contrary view.” The article noted that this moral posture is often unaccompanied by any action that might change things; it might trigger a “like” on Facebook, but little more. Since Jan. 20, that appears to be changing.

When the government gets involved in virtue signaling by implementing policies, there can be serious consequences. I’ve noted in previous columns a few issues that might trigger policy responses. For example, there is the moral condemnation of alleged forced labor in Western China involving Muslim Uighurs. U.S. Customs has recently issued “withhold release orders” on imported cotton products from China that might involve forced labor by Uighurs. It might be remembered that forced labor has been involved in cotton production in this country. The Chinese deny this, as well they might. There exists no tribunal that can settle the issue.