4 ms·

> historically very popular When? Not for a long time. Slavery and witchcraft were historically very popular ... > when you buy stuff you're losing wealth Th

by mmooss 2y ago

> historically very popular When? Not for a long time. Slavery and witchcraft were historically very popular ... > when you buy stuff you're losing wealth That's a incredible failure of understanding. I can't believe that's the basis of mercantilism. Why would anyone buy something? If you buy a house for $100,000, your wealth remains the same - you replace $100,000 in cash with a $100,000 house (ignoring complexities like a mortgage, transaction costs, etc.). That is basic accounting, of course. In fact, your wealth probably increases: The house's value is <$100,000 to the seller and >$100,000 to the buyer, or else they would be disinclined to make the effort of making the deal - it would be like trading a $10 bill for a $10 bill, with lots of time and transaction costs. Market value - the value to others - may remain the same or vary, of course. The economy works because people make these value-increasing transactions. I take $10 of inputs, manufacture $20 worth of output, and sell it to you for $15. We both gain $5. If your business isn't producing more output than its input, you're going to be out of business soon. Many transactions are better with people who happen to be outside the borders of your country - why wouldn't they be?

arrosenberg 2y ago
You are thinking about it as an individual instead of as a state. If you put yourself in the position of Louis XVI as the King of France, it makes more sense.
- mmooss 2y ago
  I agree there's a big difference between individuals and states economically. And I understand why Louis (do you mean XIV?), in the absence any modern economic theory, pursued mercantilism. But if Louis had known modern economic theory, it would have been ridiculous. He would know that the wealthiest, most powerful nations ever on Earth - universally, with no others competing - were built on free trade.
  - DeathArrow 2y ago
    >He would know that the wealthiest, most powerful nations ever on Earth - universally, with no others competing - were built on free trade. It really depends on the context. Roman Empire wasn't built on free trade.
    - mmooss 2y ago
      We are far, far wealthier, freer, more everything than the Romans. In their context, they did relatively very well. We are far beyond that. The Romans worship us, or would if they could have known. There is just no comparison. The worship of them is bizarre.
- skywal_l 2y ago
  You are probably thinking of Louis the XIV[0] (not Louis the XVI) [0] https://en.wikipedia.org/wiki/French_mercantilism https://en.wikipedia.org/wiki/French_mercantilism
  - arrosenberg 2y ago
    You are correct, I was too lazy to look it up and I eyeballed the timeline.
jay_kyburz 2y ago
If you build a house from scratch, you created 100K of stuff. If you buy a house for 100K then sit on your ass for a year, you are no richer than before.
- mmooss 2y ago
  You should look into real estate investment performance.
  - jay_kyburz 2y ago
    Houses depreciate. It's the land that makes you rich. :)
    - lotsofpulp 2y ago
      Assuming price of materials and labor remain constant or decreasing.
    - DeathArrow 2y ago
      It's the developed land. A house built on the land you own in a city that people would kill to buy/rent there. A house in the middle of Sahara desert is worth a negative amount.
  - DeathArrow 2y ago
    Donald Trump is a prime example.
forgetfreeman 2y ago
"The economy works because people make these value-increasing transactions. I take $10 of inputs, manufacture $20 worth of output, and sell it to you for $15." You pretty much nailed the arguments in favor of trade protectionism right there. Import cheap unprocessed raw materials, export expensive finished goods, capture the majority of value created in the process.
- mmooss 2y ago
  How does that support protectionism? For one thing, it involves imports and exports, which requires trading partners who will want to sell you things too. Maybe the argument for colonialism? Regardless, countries that largely operate without protectionism or colonialism have become the wealthiest in the history of the world, without any real competition. There's not much argument remaining.
  - DeathArrow 2y ago
    >Regardless, countries that largely operate without protectionism or colonialism have become the wealthiest in the history of the world, without any real competition. There's not much argument remaining. The wealthiest economies now are those of China and US. And both used colonialism and protectionism. The further we look in history, the more we see most powerful economies practicing both colonialism and protectionism. From British Empire to Roman Empire.
    - mmooss 2y ago
      > The wealthiest economies now are those of China and US. China is not, unless you just add up the large number of people and their bank accounts (those who have any savings). Per capita, the "countries that largely operate without protectionism or colonialism have become the wealthiest in the history of the world, without any real competition.", as I said. > both used colonialism and protectionism Could you give examples? I mean, they used some, but not substantially. Unless you mean the distant past. Note how this discussion is framed - for countries. I'm concerned with, and I think we should be concerned with, people. > The further we look in history, the more we see most powerful economies practicing both colonialism and protectionism. If you look at history, we are overwhelmingly nomadic hunter-gathers with stone tools - ~190,000 of 200,000 years of Homo sapiens. We are well beyond that history, and the history you name. Our economies far outstrip those empires, as well as our freedom and human rights and the benefit our economies provide to those outside aristrocracy. Why do you keep trying to go backward to a relatively poor, oppressive time.
tgaj 2y ago
I think that's a misunderstanding. If you could build the house using only resources that you already have than you would have 100k dollars AND a house. That's the idea of mercantilism. Of course sometimes you just don't have needed resources and than you have to buy something but you should limit it to things you can't obtain in any other way. Mercantilism is one of the reasons of colonialism. If you can take resources from some part of the world that you don't really care about, then you are adding wealth to your own country for basically free.
- mmooss 2y ago
  > If you could build the house using only resources that you already have than you would have 100k dollars AND a house. You still have to spend money on materials and labor - they are never free. You need to take them from other uses, and people may outbid you for them. There isn't infinite lumber and labor lying around the US for free - building houses is expensive! The core of economics is there is a scarcity of resources and we want to allocate them as efficiently as possible. Money's fungibility allows us to move resources easily and rapidly. I can send you $50,000 much more easily than my car - you might be on a different continent; you might not even want my car or agree on its value, but I can count on you wanting $50K because you can buy whatever you need with it (a car, a few servers, a trip around the world ...). It turns out in reality that someone with better skills and capital (hard resources, such as heavy equipment) can build a house so much more efficiently than you, that you would save money by hiring them rather than doing it yourself. That's specialization, another economic fundamental. Think of most work - orthopedists, C developers, pipe fitters, etc. They are so much more efficient than you are, you wouldn't dream of trying to do it yourself (on any significant level) - even if you are in the same domain, such as internists or Python developers. You don't lose out at all, because they also hire you to do what you are specialized at. Then instead of the farmer building a house and the carpenter growing squash, both get better and more houses and squash for much less money. > If you can take resources from some part of the world that you don't really care about, then you are adding wealth to your own country for basically free. If you shoot someone on the street, you can take their wallet for 'free'! ... You are arguing against fundemental economics and even basic accounting. If you care about these things, learn about them a little. Microeconomics is actually fascinating, and basic double-entry accounting is essential.
lesuorac 2y ago
> > historically very popular > When? Not for a long time. Slavery and witchcraft were historically very popular ... The wikipedia article places it as 16th to 19th century which is a longer time period than Globalism was popular. If the end of my post wasn't clear, I'm not a fan of Mercantilism but one does need to understand the other side. Although a big critique I have of Globalism is that the gains from trade are not evenly dispersed automatically so countries like the US really need to raise the top tax rate and increase (or at least not lower) redistribution otherwise you get high income equality. Also, slavery and witchcraft are still practiced to this day although maybe not globally popular. > > when you buy stuff you're losing wealth > That's a incredible failure of understanding. I can't believe that's the basis of mercantilism. Why would anyone buy something? Economic theories like Mercantilism are on the country level so individuals would still buy stuff because they're not practicing Mercantilism. On the country level, yeah you don't buy stuff. If your citizens love coffee and your climate doesn't support growing coffee beans then you get a South America colony so now your climate does support growing coffee beans. Somebody's answer to the house example is pretty good to read as well - https://news.ycombinator.com/item?id=43630218 https://news.ycombinator.com/item?id=43630218 > Many transactions are better with people who happen to be outside the borders of your country - why wouldn't they be? At the macro-level sure. However, if the USA had continued to practices mercantilism post-WW2 then we wouldn't have complaints about the lack of manufacturing. The industrial plants in China would've never been built by US investment because that's literally handing money away to another country. If China doesn't have a factory its irrelevant if their labor is cheaper; the only labor with access to a factory is the USA.
- LastTrain 2y ago
  > The wikipedia article places it as 16th to 19th century which is a longer time period than Globalism was popular. When did globalism stop being popular?
  - dgfl 2y ago
    Did you happen to miss recent US news?

by mmooss 2y ago

arrosenberg 2y ago

You are thinking about it as an individual instead of as a state. If you put yourself in the position of Louis XVI as the King of France, it makes more sense.

mmooss 2y ago
I agree there's a big difference between individuals and states economically. And I understand why Louis (do you mean XIV?), in the absence any modern economic theory, pursued mercantilism. But if Louis had known modern economic theory, it would have been ridiculous. He would know that the wealthiest, most powerful nations ever on Earth - universally, with no others competing - were built on free trade.
- DeathArrow 2y ago
  >He would know that the wealthiest, most powerful nations ever on Earth - universally, with no others competing - were built on free trade. It really depends on the context. Roman Empire wasn't built on free trade.
  - mmooss 2y ago
    We are far, far wealthier, freer, more everything than the Romans. In their context, they did relatively very well. We are far beyond that. The Romans worship us, or would if they could have known. There is just no comparison. The worship of them is bizarre.
skywal_l 2y ago
You are probably thinking of Louis the XIV[0] (not Louis the XVI) [0] https://en.wikipedia.org/wiki/French_mercantilism https://en.wikipedia.org/wiki/French_mercantilism
- arrosenberg 2y ago
  You are correct, I was too lazy to look it up and I eyeballed the timeline.

jay_kyburz 2y ago

If you build a house from scratch, you created 100K of stuff. If you buy a house for 100K then sit on your ass for a year, you are no richer than before.

mmooss 2y ago
You should look into real estate investment performance.
- jay_kyburz 2y ago
  Houses depreciate. It's the land that makes you rich. :)
  - lotsofpulp 2y ago
    Assuming price of materials and labor remain constant or decreasing.
  - DeathArrow 2y ago
    It's the developed land. A house built on the land you own in a city that people would kill to buy/rent there. A house in the middle of Sahara desert is worth a negative amount.
- DeathArrow 2y ago
  Donald Trump is a prime example.

forgetfreeman 2y ago

"The economy works because people make these value-increasing transactions. I take $10 of inputs, manufacture $20 worth of output, and sell it to you for $15." You pretty much nailed the arguments in favor of trade protectionism right there. Import cheap unprocessed raw materials, export expensive finished goods, capture the majority of value created in the process.

mmooss 2y ago
How does that support protectionism? For one thing, it involves imports and exports, which requires trading partners who will want to sell you things too. Maybe the argument for colonialism? Regardless, countries that largely operate without protectionism or colonialism have become the wealthiest in the history of the world, without any real competition. There's not much argument remaining.
- DeathArrow 2y ago
  >Regardless, countries that largely operate without protectionism or colonialism have become the wealthiest in the history of the world, without any real competition. There's not much argument remaining. The wealthiest economies now are those of China and US. And both used colonialism and protectionism. The further we look in history, the more we see most powerful economies practicing both colonialism and protectionism. From British Empire to Roman Empire.
  - mmooss 2y ago
    > The wealthiest economies now are those of China and US. China is not, unless you just add up the large number of people and their bank accounts (those who have any savings). Per capita, the "countries that largely operate without protectionism or colonialism have become the wealthiest in the history of the world, without any real competition.", as I said. > both used colonialism and protectionism Could you give examples? I mean, they used some, but not substantially. Unless you mean the distant past. Note how this discussion is framed - for countries. I'm concerned with, and I think we should be concerned with, people. > The further we look in history, the more we see most powerful economies practicing both colonialism and protectionism. If you look at history, we are overwhelmingly nomadic hunter-gathers with stone tools - ~190,000 of 200,000 years of Homo sapiens. We are well beyond that history, and the history you name. Our economies far outstrip those empires, as well as our freedom and human rights and the benefit our economies provide to those outside aristrocracy. Why do you keep trying to go backward to a relatively poor, oppressive time.

tgaj 2y ago

I think that's a misunderstanding. If you could build the house using only resources that you already have than you would have 100k dollars AND a house. That's the idea of mercantilism. Of course sometimes you just don't have needed resources and than you have to buy something but you should limit it to things you can't obtain in any other way. Mercantilism is one of the reasons of colonialism. If you can take resources from some part of the world that you don't really care about, then you are adding wealth to your own country for basically free.

mmooss 2y ago
> If you could build the house using only resources that you already have than you would have 100k dollars AND a house. You still have to spend money on materials and labor - they are never free. You need to take them from other uses, and people may outbid you for them. There isn't infinite lumber and labor lying around the US for free - building houses is expensive! The core of economics is there is a scarcity of resources and we want to allocate them as efficiently as possible. Money's fungibility allows us to move resources easily and rapidly. I can send you $50,000 much more easily than my car - you might be on a different continent; you might not even want my car or agree on its value, but I can count on you wanting $50K because you can buy whatever you need with it (a car, a few servers, a trip around the world ...). It turns out in reality that someone with better skills and capital (hard resources, such as heavy equipment) can build a house so much more efficiently than you, that you would save money by hiring them rather than doing it yourself. That's specialization, another economic fundamental. Think of most work - orthopedists, C developers, pipe fitters, etc. They are so much more efficient than you are, you wouldn't dream of trying to do it yourself (on any significant level) - even if you are in the same domain, such as internists or Python developers. You don't lose out at all, because they also hire you to do what you are specialized at. Then instead of the farmer building a house and the carpenter growing squash, both get better and more houses and squash for much less money. > If you can take resources from some part of the world that you don't really care about, then you are adding wealth to your own country for basically free. If you shoot someone on the street, you can take their wallet for 'free'! ... You are arguing against fundemental economics and even basic accounting. If you care about these things, learn about them a little. Microeconomics is actually fascinating, and basic double-entry accounting is essential.

lesuorac 2y ago

> > historically very popular > When? Not for a long time. Slavery and witchcraft were historically very popular ... The wikipedia article places it as 16th to 19th century which is a longer time period than Globalism was popular. If the end of my post wasn't clear, I'm not a fan of Mercantilism but one does need to understand the other side. Although a big critique I have of Globalism is that the gains from trade are not evenly dispersed automatically so countries like the US really need to raise the top tax rate and increase (or at least not lower) redistribution otherwise you get high income equality. Also, slavery and witchcraft are still practiced to this day although maybe not globally popular. > > when you buy stuff you're losing wealth > That's a incredible failure of understanding. I can't believe that's the basis of mercantilism. Why would anyone buy something? Economic theories like Mercantilism are on the country level so individuals would still buy stuff because they're not practicing Mercantilism. On the country level, yeah you don't buy stuff. If your citizens love coffee and your climate doesn't support growing coffee beans then you get a South America colony so now your climate does support growing coffee beans. Somebody's answer to the house example is pretty good to read as well - https://news.ycombinator.com/item?id=43630218 https://news.ycombinator.com/item?id=43630218 > Many transactions are better with people who happen to be outside the borders of your country - why wouldn't they be? At the macro-level sure. However, if the USA had continued to practices mercantilism post-WW2 then we wouldn't have complaints about the lack of manufacturing. The industrial plants in China would've never been built by US investment because that's literally handing money away to another country. If China doesn't have a factory its irrelevant if their labor is cheaper; the only labor with access to a factory is the USA.

LastTrain 2y ago
> The wikipedia article places it as 16th to 19th century which is a longer time period than Globalism was popular. When did globalism stop being popular?
- dgfl 2y ago
  Did you happen to miss recent US news?