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I notice that domestic production seems to be implicitly valued at zero which seems likely to be wrong to me.

by cgag 9y ago

barry-cotter 9y ago
The case for free trade does not care about borders. It cares about consumption, which there will be more of if things can be produced most efficiently. Things can be produced most efficiently with maximum specialisation, which is likeliest with free trade. Domestic production can be consumed more easily than foreign production so it is more valued because transport costs are lower. The border between San Francisco is as relevant as that between California and Nevada, or the US and Mexico. There are certainly things where it’s good to have domestic production, vaccines for one. But the argument is grossly overused. The wool of angora goats is protected in the US as of military value. Trading for what you need has worked out well for plenty of countries. Switzerland, Luxembourg, Costa Rica, Bahrain, Singapore, Hong Kong, my native Ireland. Domestic production is overrated.
- andosa 9y ago
  Overrating domestic value creation is how you end up being a third world country. I think you are oversimplifying free market dynamics. Free market doesn't magically create optimal results for consumers (see monopolies and the resulting lack of competition and suboptimal results for consumers as one example). Similarly it doesn't magically create optimal results for maximising the well being of a country.
- TheAdamAndChe 9y ago
  > It cares about consumption, which there will be more of if things can be produced most efficiently. This is part of the problem. Production doesn't occur in a vacuum, and the most efficient methods of production are often either terrible for the workers, terrible for the environment, or terrible for society. Pure, unfettered globalization would be ideal if the goal was production and wealth generation maximization because it maximizes the labor pool and capital allocation efficiency, but those shouldn't be the only things that governments and economists worry about.
  - barry-cotter 9y ago
    If you look at where most of the world’s wealth is produced and how your worries may be allayed. The US and the EU are almost half of the world economy by themselves. Add Canada and Japanand you’re comfortably above half. If there are problems caused by economic growth the products of said growth can buy solutions to them. https://en.m.wikipedia.org/wiki/Kuznets_curve#Environmental_Kuznets_curve https://en.m.wikipedia.org/wiki/Kuznets_curve#Environmental_...

I notice that domestic production seems to be implicitly valued at zero which seems likely to be wrong to me.

by cgag 9y ago

I notice that domestic production seems to be implicitly valued at zero which seems likely to be wrong to me.

The case for free trade does not care about borders. It cares about consumption, which there will be more of if things can be produced most efficiently. Things can be produced most efficiently with maximum specialisation, which is likeliest with free trade. Domestic production can be consumed more easily than foreign production so it is more valued because transport costs are lower. The border between San Francisco is as relevant as that between California and Nevada, or the US and Mexico. There are certainly things where it’s good to have domestic production, vaccines for one. But the argument is grossly overused. The wool of angora goats is protected in the US as of military value. Trading for what you need has worked out well for plenty of countries. Switzerland, Luxembourg, Costa Rica, Bahrain, Singapore, Hong Kong, my native Ireland. Domestic production is overrated.

andosa 9y ago
Overrating domestic value creation is how you end up being a third world country. I think you are oversimplifying free market dynamics. Free market doesn't magically create optimal results for consumers (see monopolies and the resulting lack of competition and suboptimal results for consumers as one example). Similarly it doesn't magically create optimal results for maximising the well being of a country.
TheAdamAndChe 9y ago
> It cares about consumption, which there will be more of if things can be produced most efficiently. This is part of the problem. Production doesn't occur in a vacuum, and the most efficient methods of production are often either terrible for the workers, terrible for the environment, or terrible for society. Pure, unfettered globalization would be ideal if the goal was production and wealth generation maximization because it maximizes the labor pool and capital allocation efficiency, but those shouldn't be the only things that governments and economists worry about.
- barry-cotter 9y ago
  If you look at where most of the world’s wealth is produced and how your worries may be allayed. The US and the EU are almost half of the world economy by themselves. Add Canada and Japanand you’re comfortably above half. If there are problems caused by economic growth the products of said growth can buy solutions to them. https://en.m.wikipedia.org/wiki/Kuznets_curve#Environmental_Kuznets_curve https://en.m.wikipedia.org/wiki/Kuznets_curve#Environmental_...