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Devils advocate: what are the limits of this? I.e., does it imply any arbitrarily boundary of commerce is invalid? It strikes me that most people would feel li

• JumpCrisscross 3y ago
  > does it imply any arbitrarily boundary of commerce is invalid Not invalid as much as leaves everyone in the measured system materially worse off. Mercantilism is simply a failed way to raise your own living standards. (It might be a good way to concentrate wealth within your system. But only within, not from without.)
  • bumby 3y ago
    Isn’t this just playing a trick with system boundaries though? If I hire my son to do my yard work instead of my neighbor, how does that make my son objectively worse off? Within system/family, obviously this has increased wealth compared to hiring my neighbor. Without system, it has only made me worse off to the proportion that I have "overpaid" my son. But because it's zero-sum, my son has benefited to the exact proportion that I've been made worse off. Edit: Back to the context of globalization, "overpaying" my neighbor to build my car only makes me worse off to the same proportion s/he has been helped. When you factor in the concept of preference for psychological distance, that might be a worthy tradeoff. I.e., there's a psychological basis for valuing the financial well-being of my son/neighbor over the abstract person in another country* and this action seems logically consistent with that psychological framework. * This isn't to say the decision is morally justified. That's a different argument than the economic one.
    • JumpCrisscross 3y ago
      > Isn’t this just playing a trick with system boundaries though We agree. Consider the world to be your street and your country your neighbor and your houses. Paying your neighbor more to keep the money local doesn't work to make your "country" richer. It just helps concentrate wealth with your neighbor. Mercantilist protectionism is about redistributing, not increasing, domestic resources.
      • bumby 3y ago
        Right, but isn't there value in concentrating wealth to those who you have psychological proximity with? Consider a more dire twist: you have money to pay for a life-saving operation for either your own child or another child on the other side of the world. Are you saying there is should be no personal preference in this scenario? I'm saying there are perfectly reasonable expectations to concentrate that wealth due to human psychology once you move away from the academic and abstract.
        • JumpCrisscross 3y ago
          > isn't there value in concentrating wealth to those who you have psychological proximity with Yes. That's why I said the difference isn't invalid. It's just more like a hidden redistributive tax. In small doses, this is fine and a way democracies repay their patrons. In larger doses, it leaves everyone poor. Too poor to afford a life-saving operation for anyone around.
          • bumby 3y ago
            Ah, I see you point. Sorry it took me awhile to get there :) Regarding "it leaves everyone poor", how is the case if it's zero sum? It seems like it comes down to how you define your metric of 'poor'. It seems like it presupposes there isn't enough money to go around, so it's better to have a few people rich and the rest destitute, rather than have everyone just be marginally poor. Or are we getting into productivity incentive territory here?
            • JumpCrisscross 3y ago
              > how is the case if it's zero sum Trade isn’t zero sum. Ricardian mechanics is what overturned mercantilism. You paying more for your neighbour to do work than someone down the street deprives you of money and everyone of economies of scale.
              • bumby 3y ago
    • njarboe 3y ago
      If you son can make 4x the hourly rate doing something else and does not do that because he is doing yard work, then you have decreased wealth. The key is in the if.
      • bumby 3y ago
        I agree that forced labor completely changes the scenario. Nobody is forcing my son to do yard work in this scenario though. Both the neighbor and son are willing, but only one can do the work.
• marcosdumay 3y ago
  > does it imply any arbitrarily boundary of commerce is invalid? Yes. It says exactly that. Now, there are details that can change things either way. But the one thing about economics, that is known for about 3 centuries, is that usually arbitrary boundaries to commerce make people poorer. Usually, both on average and on the poor extreme. There is more variability of impact for rich people.
  • bumby 3y ago
    I’m not doubting that claim but do you have any further reading to back it up?
    • marcosdumay 3y ago
      You want any introductory textbook on economics. Just avoid anything advanced enough to have a small focus.