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re: "you either have strong currency or strong exports" if i understood correctly, you are stating that the only way to have strong exports is by having cheape

re: "you either have strong currency or strong exports" if i understood correctly, you are stating that the only way to have strong exports is by having cheaper labor ("... losing jobs and industries to those nations that are willing to have expensive consumer goods for their populations in order to export more and import less.") well, that is one (easy) way to do it, but it's not the only one. for example, you could have more productive labor. i think the fact that underdeveloped countries are still net importers of complex goods such as cars and computers, despite having the cheapest labor, supports this. also if you allow for some poetry, i guess we could say that trust is like a baloon in the sense that a tiny hole can destroy it completely and abruptly

carefree-bob 2mo ago
No, you did not understand correctly if your eyes read "cheap currency" and your mind read "cheap labor". Something went wrong between the text processing unit and the meaning processing unit. Perhaps your meaning processing unit is overwhelmed with all sorts of preconceived notions and voices that are interfering with your text processing unit. Look, this is not hard. You have two countries, one makes bad apples and the other makes fantastic, amazing, glorious apples. One was seeded by Johnny Appleseed and the other by Johnny Rottenseed. The only labor involved is picking the apples, which both countries do equally well. Does that mean that the GA (Glorious Apple) country will run a surplus against the BA (Bad Apple) country? No, it will not. Trade will still be balanced, because the exchange rate will adjust so that neither country is running a surplus or a deficit. Maybe one Glorious Apple is worth 10 Bad Apples. Then the Bad Apple country will import 100 glorious apples and export 1000 Bad Apples. So the terms of trade, the ratio of GA/BA rises, so that total trade is balanced. It is balanced when one glorious apple dollar is worth 10 bad apple dollars. The only way that this will not happen is when someone interferes with the exchange rate. Now, if someone interferes, say by making it illegal to sell more than 5 Bad Apples for 1 Glorious Apple, then Glorious Apples will look amazingly cheap to the Bad Apple people, but the Bad Apples will look awfully expensive to the Glorious Apple people, and so this artificial strengthening of the Bad Apple currency will create a huge trade deficit, as people rush to dispose themselves of their bad apples and obtain the superior and affordable glorious apples. On the other hand, suppose that we see the Bad Apple country running a deficit against the Glorious Apple country. What can we surmise? That for some reason, the investment demand for Bad Apple currency is high, causing people to want to accumulate Bad Apple dollars, even though the Apples made there kinda suck. That investment demand is what creates the trade deficit, by inflating the value of the Bad Apple. And it is the only thing that can cause that deficit. Nowhere anywhere here does the price of labor enter into the picture. That is a you story -- I would try to fix that meaning processing unit.
- mishellaneous 1mo ago
  > you did not understand correctly if your eyes read "cheap currency" and your mind read "cheap labor". i actually read "expensive consumer goods for their populations" and concluded "cheap labor", as i pointed out. suppose you ask citizens from nation A and nation B how many hours they'd have to work to be able to buy a certain good. if both answer the same number, then how can you say that the good is more expensive in any one of the nations? and if citizen from nation A answers a larger number than citizen from nation B, so that the good is more expensive in nation A, then how does A not have cheaper labor than B, as one unit of the same good literally buys your more labor from A than from B? i'm still digesting your apple example. i'd be interested if you could cite a real case of this happening, because it doesn't agree with everything that i have seen. for example, sometimes the apple business in BA will simply die. this is what i was getting at when i mentioned that "underdeveloped countries are still net importers of complex goods". if you take a mildly complex good like refrigerators or office chairs, chances are that a random not-so-developed country has some local manufacturers. but they're just struggling, not exporting proportionally larger quantities. indeed the only way they'd export K>1 refrigerators for every Samsung imported is if there were 0 exports and 0 imports (so the country is so poor no one has a good refrigerator). also, suppose that BA produces a total of N apples per year per capita. if the people in GA work the same hours, then GA produces the same number, N, of apples per year per capita, because they are both equally good at picking apples. since trade is balanced, it does not affect the level of value/utility/wealth on each side, whatever the amount of trade. so in the end, for the same hours worked, BA has a total product of N bad apples per year per capita, which is 10 times less than GA, which has a total product of N good apples per year per capita. people in BA are poorer. assuming people in this economy just buy/sell work and apples, the people in BA must work for less value, i.e. they are cheaper labor. if labor in BA is more or less than 10x cheaper than in GA, then apple orchards will simply close in BA and reopen in GA or vice-versa until it gets 10x cheaper, at which point there's no point in switching. this is moreover compatible with the real anecdotal examples i mentioned i have seen. i'm open to recommended readings.
deleted 1mo ago
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carefree-bob 2mo ago

No, you did not understand correctly if your eyes read "cheap currency" and your mind read "cheap labor". Something went wrong between the text processing unit and the meaning processing unit. Perhaps your meaning processing unit is overwhelmed with all sorts of preconceived notions and voices that are interfering with your text processing unit. Look, this is not hard. You have two countries, one makes bad apples and the other makes fantastic, amazing, glorious apples. One was seeded by Johnny Appleseed and the other by Johnny Rottenseed. The only labor involved is picking the apples, which both countries do equally well. Does that mean that the GA (Glorious Apple) country will run a surplus against the BA (Bad Apple) country? No, it will not. Trade will still be balanced, because the exchange rate will adjust so that neither country is running a surplus or a deficit. Maybe one Glorious Apple is worth 10 Bad Apples. Then the Bad Apple country will import 100 glorious apples and export 1000 Bad Apples. So the terms of trade, the ratio of GA/BA rises, so that total trade is balanced. It is balanced when one glorious apple dollar is worth 10 bad apple dollars. The only way that this will not happen is when someone interferes with the exchange rate. Now, if someone interferes, say by making it illegal to sell more than 5 Bad Apples for 1 Glorious Apple, then Glorious Apples will look amazingly cheap to the Bad Apple people, but the Bad Apples will look awfully expensive to the Glorious Apple people, and so this artificial strengthening of the Bad Apple currency will create a huge trade deficit, as people rush to dispose themselves of their bad apples and obtain the superior and affordable glorious apples. On the other hand, suppose that we see the Bad Apple country running a deficit against the Glorious Apple country. What can we surmise? That for some reason, the investment demand for Bad Apple currency is high, causing people to want to accumulate Bad Apple dollars, even though the Apples made there kinda suck. That investment demand is what creates the trade deficit, by inflating the value of the Bad Apple. And it is the only thing that can cause that deficit. Nowhere anywhere here does the price of labor enter into the picture. That is a you story -- I would try to fix that meaning processing unit.

mishellaneous 1mo ago
> you did not understand correctly if your eyes read "cheap currency" and your mind read "cheap labor". i actually read "expensive consumer goods for their populations" and concluded "cheap labor", as i pointed out. suppose you ask citizens from nation A and nation B how many hours they'd have to work to be able to buy a certain good. if both answer the same number, then how can you say that the good is more expensive in any one of the nations? and if citizen from nation A answers a larger number than citizen from nation B, so that the good is more expensive in nation A, then how does A not have cheaper labor than B, as one unit of the same good literally buys your more labor from A than from B? i'm still digesting your apple example. i'd be interested if you could cite a real case of this happening, because it doesn't agree with everything that i have seen. for example, sometimes the apple business in BA will simply die. this is what i was getting at when i mentioned that "underdeveloped countries are still net importers of complex goods". if you take a mildly complex good like refrigerators or office chairs, chances are that a random not-so-developed country has some local manufacturers. but they're just struggling, not exporting proportionally larger quantities. indeed the only way they'd export K>1 refrigerators for every Samsung imported is if there were 0 exports and 0 imports (so the country is so poor no one has a good refrigerator). also, suppose that BA produces a total of N apples per year per capita. if the people in GA work the same hours, then GA produces the same number, N, of apples per year per capita, because they are both equally good at picking apples. since trade is balanced, it does not affect the level of value/utility/wealth on each side, whatever the amount of trade. so in the end, for the same hours worked, BA has a total product of N bad apples per year per capita, which is 10 times less than GA, which has a total product of N good apples per year per capita. people in BA are poorer. assuming people in this economy just buy/sell work and apples, the people in BA must work for less value, i.e. they are cheaper labor. if labor in BA is more or less than 10x cheaper than in GA, then apple orchards will simply close in BA and reopen in GA or vice-versa until it gets 10x cheaper, at which point there's no point in switching. this is moreover compatible with the real anecdotal examples i mentioned i have seen. i'm open to recommended readings.

deleted 1mo ago

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