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Comparative advantage is a thing, an economy can function perfectly fine without a local source of steel manufacturing. I don’t understand why people fetishize

Comparative advantage is a thing, an economy can function perfectly fine without a local source of steel manufacturing. I don’t understand why people fetishize manufacturing of cheap consumer goods as a sector that is more essential than anything else.

jakeinspace 3y ago
Because if that trade partner unilaterally shuts off trade with you due to a dispute or war, then you are hosed. They can probably find other buyers for their steel, but you will have to pay a lot more, if you can find enough at all.
- yaa_minu 3y ago
  This problem seems completely unrealistic because then you simply buy through the countries they haven't banned? What you're suggesting will only work if said country is a global superpower that can bully every country to tow the line. At the end of the day, no country can produce all the "critical" things it needs so this national security defence of restrictions on trade seems like a very unwise insurance to buy in almost all cases except maybe your millitary supply chain.
  - edgyquant 3y ago
    Very strange watching you call the current situation “completely unrealistic.” Then again reality is not realistic I suppose.
  - kmeisthax 3y ago
    secondary sanctions
- Retric 3y ago
  Tariffs, which each country can apply, limit any trade it doesn’t believe are in its interest
brmgb 3y ago
> without a local source of steel manufacturing Good luck when the war starts and you can’t build weapons anymore because your source of strategic ressources are not under your direct control. There are good reasons modern economists are so critical of Ricardo. You need to take what he wrote with a major grain of sand. The actual situation is a lot more nuanced.
slv77 3y ago
Comparative advantage is a thing but in some cases those comparative advantages are an ability to turn a blind eye to the environment or the ability to repress your population. Also, if there were no strategic implications there would be no nations that perused mercantilist policies and no need for WTO dispute resolution over things like dumping and subsidies.

jakeinspace 3y ago

Because if that trade partner unilaterally shuts off trade with you due to a dispute or war, then you are hosed. They can probably find other buyers for their steel, but you will have to pay a lot more, if you can find enough at all.

yaa_minu 3y ago
This problem seems completely unrealistic because then you simply buy through the countries they haven't banned? What you're suggesting will only work if said country is a global superpower that can bully every country to tow the line. At the end of the day, no country can produce all the "critical" things it needs so this national security defence of restrictions on trade seems like a very unwise insurance to buy in almost all cases except maybe your millitary supply chain.
- edgyquant 3y ago
  Very strange watching you call the current situation “completely unrealistic.” Then again reality is not realistic I suppose.
- kmeisthax 3y ago
  secondary sanctions
Retric 3y ago
Tariffs, which each country can apply, limit any trade it doesn’t believe are in its interest

brmgb 3y ago

> without a local source of steel manufacturing Good luck when the war starts and you can’t build weapons anymore because your source of strategic ressources are not under your direct control. There are good reasons modern economists are so critical of Ricardo. You need to take what he wrote with a major grain of sand. The actual situation is a lot more nuanced.

slv77 3y ago

Comparative advantage is a thing but in some cases those comparative advantages are an ability to turn a blind eye to the environment or the ability to repress your population. Also, if there were no strategic implications there would be no nations that perused mercantilist policies and no need for WTO dispute resolution over things like dumping and subsidies.