Alan Deardorff on Trade Theory, Globalization, and the Evolution of Economic Thinking

Alan Deardorff’s path into international economics began, as he puts it, “because I was a terrible student in physics.” After struggling through his undergraduate years at Stanford, Deardorff shifted fields almost by accident—motivated partly by the Vietnam draft and partly by curiosity. “I needed to go to graduate school because back then if I didn’t, I would have been drafted,” he recalls. “I had a few courses in economics and done reasonably well in them… so I chose economics as the subject I would try to go to graduate school in.” A National Defense Education Act fellowship helped him land at Cornell, where, by chance, a class in international economics and a timely job offer set the course for his career.

“I didn’t plan to study international trade,” he admits. “When I was on the job market, my professor got a call from Michigan. They had an opening for an international economist. Would I be willing for him to tell them that that’s what I was? For the sake of getting a job I said sure, absolutely. And as a result, that sort of determined my whole career.”

At Michigan, Deardorff joined Robert Stern, whose mentorship and collaboration shaped decades of research. Their “Michigan Model” of world production and trade became a cornerstone in applied international economics. “We didn’t gather lots of data and fit regressions,” he explains. “Our approach was simply using economic theory of supply and demand—plug in numbers and guess, really just guess, at the elasticities.” Though it wouldn’t make the top journals, the model offered policymakers a concrete framework for understanding the global effects of trade policy. “It was complicated to do,” Deardorff says, “because in order to do it for entire economies and countries… you had to solve those equations on a mainframe computer. It was pretty primitive, but it worked.”

His intellectual lineage traces back to figures like Yaroslav Vanek and Ronald Jones, who influenced his visual, diagram-driven approach. “He was really into using diagrams, and those fit me extremely well,” Deardorff recalls. “That provided really the basis for my career.”

As trade theory evolved, so did his perspective on its policy relevance. Deardorff’s work often circles back to a tension at the heart of economics: elegant theory versus messy human impact. “Everything about trade theory seems to be misunderstood,” he says. “Policymakers focus on the losses—on the people who get hurt—while ignoring that the gains to consumers, though individually small, add up to a huge amount.”

He is candid about the discipline’s shortcomings: “We economists have not done a good job of pushing policymakers to acknowledge and prepare for the harm done to the losers. We don’t have good policies for helping them.” The U.S. once offered “trade adjustment assistance,” he notes, but it “wasn’t a very good program… still, it was better than nothing.”

Deardorff’s reflections on globalization are equally measured. “I think economists have become increasingly aware of the costs to those who lose,” he says, pointing to the “China shock” literature. Yet, he remains a defender of trade’s broad benefits: “Even when it looks like comparative advantage doesn’t apply for individual goods, the general idea holds on average—and the benefits from international trade apply in general even where the pattern of trade doesn’t seem to conform.”

When asked about the Trump administration’s trade policies, his tone sharpens. “Nothing like that had ever happened,” he says of Trump’s sweeping tariffs. “He found a law that had never been used in this way before… claimed it was a national security issue, and got away with it.” Economically, Deardorff argues, the results were clear: “It was hurting the United States, but he did it anyway. He felt it was doing something good.” He’s skeptical the U.S. will reverse course. “Once you raise a tariff, it’s very hard to ever lower it,” he explains, citing the “chicken tariff” from the 1960s—still in place decades later. “That’s going to happen now with most of the tariffs Trump put in.”

Looking forward, Deardorff sees a shifting global order. “We very much are moving in the direction of the U.S. simply becoming less relevant,” he says. “China is replacing us—or trying to—and probably succeeding in providing the leadership on continuing international trade.” While he doesn’t see the U.S. collapsing into isolation, he does foresee a world where “most of the rest of the world will trade more freely with each other and benefit from doing that.”

For all his technical precision, Deardorff’s reflections carry a wry modesty. “I don’t know that I would be able to do economics today if I were starting out,” he admits. “It’s become far more technical, far more mathematical.” And when he’s not modeling world trade, he prefers a simpler game: “I enjoy poker, but not for the risk. I enjoy it for the social interaction,” he says with a laugh. “Others of my colleagues play for thousands of dollars a night. They’ve never invited me—but if they did, I’d say no.”

The 6Degrees team extends its heartfelt thanks to Alan Deardroff for sharing his time, insight, and candor on the evolution of trade theory and global economic policy. His career reminds us that ideas—and the people behind them—shape how nations understand cooperation, competition, and the enduring promise of exchange.