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While satirical discourses can make for fun reading, they often obscure the complexity of the issue at hand and need to be taken with a heaping pile of salt. H

While satirical discourses can make for fun reading, they often obscure the complexity of the issue at hand and need to be taken with a heaping pile of salt. Here is a counter-analogy to the one advanced in this letter: Imagine a world where each nation is essentially a person (this isn't strictly necessary, but the intuition to follow comes more easily when we think of our own lives, where we have a great deal more experience). Now let's say that Carla is a more efficient farmer, miner, and homebuilder than I, and that she has agreed to help me with those matters in exchange for some of my money. In a world where all people are benevolent and will provide stable help in perpetuity, this is a fine bargain; but in any other case it requires much more scrutiny. My money reserves are finite, but my need for food and resources stretches into the temporal horizon. Then I need to very carefully evaluate whether my sources of revenue are sufficient and sufficiently stable to sustain this agreement; I need to have a good backup plan if Carla can't come through for me in a time of need; and further, I need to be very assured that Carla and I won't come into later conflict in which she would be advantaged by suddenly withholding her goods and services. This isn't to argue entirely in favor of domestic self-sufficiency; there's plenty of evidence that an interdependent web of trade correlates with greater international stability and peace, which (all else being equal) seems good. The point, however, is that the issue is really very nuanced. How sure are you that your dependence on another nation is a safe and stable dependency? What's the damage, and how quickly can you adapt, if the status quo changes? Those questions are entirely irrelevant when discussing the sun's impact on producers of light--the sun is (on our timescale) stable and has no motives. So while this bit of writing may be a good counterpoint to some minor point in the debate in which it's situated, it really seems overly reductive in the broader context of international trade.

SkittyDog 5y ago
> Imagine a world where each nation is essentially a person... I gonna stop you right there, pardner. The first objection to protectionist legislation is that it benefits certain people in our country (the producers of X) by hurting the interests of other people in our same country. Because you've analogized an entire country as a single person, your analogy is by definition incapable of addressing this problem.
- penteract 5y ago
  I can see 2 interpretations of that objection, and I'm not sure which one you mean. I agree that protectionist legislation harms some individuals within the country enacting it. If you're arguing that the analogy does not take the harms into account then I disagree with you - the analogy collects all benefits and harms into the same person - if Carla is a more efficient homebuilder, then not trading with her results in having a worse home (or more time being spent on it). If you're arguing that people have a right to free trade and depriving them of that right cannot be offset by gains to others, then I think you should state this more clearly, as I'm not sure it's less controversial than the somewhat utilitarian philosophy implicit in the analogy.
  - SkittyDog 5y ago
    No, no... The problem is more basic than that. Consider this: How should we decide on whether to implement a protectionist policy, if the producer and consumer don't agree on the relative costs vs. benefits? Naively, just ask the producer(s) to put a price number on how much financial benefit they'll receive... And then ask the consumer(s) to assign a price number to their costs. The government compares the two numbers, and if the benefit of protection to producers is higher, our government implements the policy. Ok, but in practice, the financial impacts of trade policy changes are really hard to quantify, especially in advance. We don't have any obvious, objective signals like public market prices, so you'd have to dig into the business models and accounts of both domestic AND foreign firms. Public filings won't provide the right data, you'll likely need access to the confidential details that underlie their public reports. Also, you needs to assess the behavior of consumers in response to the new policy, potentially on a mass scale. You need detailed data on historical consumer behavior, plus a prediction model. Oh, and you need to predict the future of the world economy, how major events will transpire going forward, how foreign governments/firms/consumers will counter your policy... And then model the impacts of all that on consumer/producer behavior. ... Anyway, point is: Humans don't actually have sufficient tools to evaluate the specific financial effects of trade policy changes. Our best, brightest, most well-informed analysts can make some aggregate guesses, but in the real world the analysts are right almost as often as they're wrong. Hypothetically, IF we had a relatively reliable, accurate ability to evaluate the impacts, we could make policy that way. But we don't, so we don't. Moral arguments that rely on such a capability are just wishes for horses.
Green_man 5y ago
The point about cost ("My money reserves are finite...") seems to be addressed by Carla's superior productivity. To pay someone in your own country would definitionally cost more than paying someone in a more productive country (assuming identical output, ignoring shipping cost, etc). I think your analogy of 1 nation == 1 person is obscuring complexity as well. A country with a market economy couldn't simply _do_ something, they'd have to pay for it (with incentives, taxation, debt, etc.), even if they aren't trading with another country. In terms of your analogy, if you want to do your own "farming, mining, and homebuilding", then you'd have to pay "yourself" more than you'd pay Carla, or accept inferior output. These points make me consider that what you mean by "money reserves" refers not to actual currency, but to something like trade deficit. If this is the case, can/should nations make decisions about their economies and trade policies based on projections of trade deficits?
colechristensen 5y ago
There is a balance to be struck. You don’t want zero or infinite friction to outside trade, each has major drawbacks. You want to be able to take advantage of others’ efficiency and for others to be able to take advantage of yours. You don’t want to be trapped by change or let dependence on outsiders become a vulnerability. One key problem is being undercut by a foreign inferior product. Food where safety isn’t taken as seriously, products of explosive labor practices, things not built to design standards. It can be hard for consumers to understand and correctly value these things and they can destroy domestic products. These things tend to not be very elastic, you can’t just notice an industry you no longer have is facing shortages and rebuild it overnight.

SkittyDog 5y ago

> Imagine a world where each nation is essentially a person... I gonna stop you right there, pardner. The first objection to protectionist legislation is that it benefits certain people in our country (the producers of X) by hurting the interests of other people in our same country. Because you've analogized an entire country as a single person, your analogy is by definition incapable of addressing this problem.

penteract 5y ago
I can see 2 interpretations of that objection, and I'm not sure which one you mean. I agree that protectionist legislation harms some individuals within the country enacting it. If you're arguing that the analogy does not take the harms into account then I disagree with you - the analogy collects all benefits and harms into the same person - if Carla is a more efficient homebuilder, then not trading with her results in having a worse home (or more time being spent on it). If you're arguing that people have a right to free trade and depriving them of that right cannot be offset by gains to others, then I think you should state this more clearly, as I'm not sure it's less controversial than the somewhat utilitarian philosophy implicit in the analogy.
- SkittyDog 5y ago
  No, no... The problem is more basic than that. Consider this: How should we decide on whether to implement a protectionist policy, if the producer and consumer don't agree on the relative costs vs. benefits? Naively, just ask the producer(s) to put a price number on how much financial benefit they'll receive... And then ask the consumer(s) to assign a price number to their costs. The government compares the two numbers, and if the benefit of protection to producers is higher, our government implements the policy. Ok, but in practice, the financial impacts of trade policy changes are really hard to quantify, especially in advance. We don't have any obvious, objective signals like public market prices, so you'd have to dig into the business models and accounts of both domestic AND foreign firms. Public filings won't provide the right data, you'll likely need access to the confidential details that underlie their public reports. Also, you needs to assess the behavior of consumers in response to the new policy, potentially on a mass scale. You need detailed data on historical consumer behavior, plus a prediction model. Oh, and you need to predict the future of the world economy, how major events will transpire going forward, how foreign governments/firms/consumers will counter your policy... And then model the impacts of all that on consumer/producer behavior. ... Anyway, point is: Humans don't actually have sufficient tools to evaluate the specific financial effects of trade policy changes. Our best, brightest, most well-informed analysts can make some aggregate guesses, but in the real world the analysts are right almost as often as they're wrong. Hypothetically, IF we had a relatively reliable, accurate ability to evaluate the impacts, we could make policy that way. But we don't, so we don't. Moral arguments that rely on such a capability are just wishes for horses.

Green_man 5y ago

The point about cost ("My money reserves are finite...") seems to be addressed by Carla's superior productivity. To pay someone in your own country would definitionally cost more than paying someone in a more productive country (assuming identical output, ignoring shipping cost, etc). I think your analogy of 1 nation == 1 person is obscuring complexity as well. A country with a market economy couldn't simply _do_ something, they'd have to pay for it (with incentives, taxation, debt, etc.), even if they aren't trading with another country. In terms of your analogy, if you want to do your own "farming, mining, and homebuilding", then you'd have to pay "yourself" more than you'd pay Carla, or accept inferior output. These points make me consider that what you mean by "money reserves" refers not to actual currency, but to something like trade deficit. If this is the case, can/should nations make decisions about their economies and trade policies based on projections of trade deficits?

colechristensen 5y ago

There is a balance to be struck. You don’t want zero or infinite friction to outside trade, each has major drawbacks. You want to be able to take advantage of others’ efficiency and for others to be able to take advantage of yours. You don’t want to be trapped by change or let dependence on outsiders become a vulnerability. One key problem is being undercut by a foreign inferior product. Food where safety isn’t taken as seriously, products of explosive labor practices, things not built to design standards. It can be hard for consumers to understand and correctly value these things and they can destroy domestic products. These things tend to not be very elastic, you can’t just notice an industry you no longer have is facing shortages and rebuild it overnight.