Comparative Advantage Debate
Comments debate economic principles of comparative advantage, gains from trade, and arguments for free trade versus protectionism and mercantilism in international commerce.
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Probably. They deny the fact that international commerce is mutually dependent. They think the world strictly depends on them and that companies would not be profitable if they sold products elsewhere. Sure, they will earn less money, but they will still be profitable, and the lifestyle around the world will improve because all the good products that were meant to go to the US will now be available in other countries.
That's economically illiterate. Look at gains from trade and comparative advantage.
Not quite. It exports everywhere there is a comparative advantage. https://en.m.wikipedia.org/wiki/Comparative_advantage
I think it's actually the other way around. Ricardo's models show that individuals stand to gain from trading with individuals who have different opportunity costs, and at least in simplified scenarios it seems to check out. It's when you look at the bigger picture that things get tricky. Does country A want to rely on country B for oil/food/weapons/whatever-else-they-need-to-survive? That could cause issues. Are imports causing competition with a fledgling segment
The developed countries developed their industries in isolation and with protectionism, now economics says to other countries that they should focus on other stuff and let some piece of industry be dependent on other countries industries. It may work sometimes, say if you're developing other stuff that is equally valuable, if you're not then it seems like a better deal for the one who got to develop their industry. Brazil is a very good example of this, we mostly sell low value product
It's basic economics: gains from trade. It's more expensive to be entirely self-reliant.
As a programmer, you've benefitted massively by the transition of the US economy from a manufacturing based economy to an ideas & services economy. The process is called comparative advantage, where two economies benefit mutually by specializing in different ways. This is an outgrowth of the globalization that is such a hot-button issue.The history of using tariffs (taxes) to protect local industries is bad, but it would take decades of protectionist policies to make us realize exact
This is overly simplistic.You should look at the trade from in value added basis and how the trade benefits different couturiers differently.Take for example US vs China. US products exported to China have value added close to 80-90%. Chinese products exported to US have value added around 40%. If Chinese import stuff, join them together into a thing that has export value $100, only $40% of the value stays in China. When the US does the same $80-$90 of the value stays in the US.Trade ag
Trade is not a zero sum game, it enriches both parties.https://en.wikipedia.org/wiki/Comparative_advantage
Sorry, this is just drivel. Trade happens between individuals or businesses, not countries. If the numbers don’t make sense for a business they will certainly “just decline,” although the numbers might make sense for another business. The large disparity in wealth actually helps the economically weaker party oftentimes because a X% increase in cost will often mean less to the wealthy purchaser (who will mark up the product accordingly) than to the poor seller relatively.