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Politics : Foreign Affairs Discussion Group -- Ignore unavailable to you. Want to Upgrade?

To: neolib who wrote (261039)	4/8/2008 7:57:56 PM
From: TimF	Read Replies (2) \| Respond to of 281500

Economic papers tend to be more balanced than the political discussions of economists. If trade with other countries doesn't increase the net wealth what about trade between different states in the US? between different cities? Different specific individuals and businesses? International trade isn't a whole separate thing, is just trade on a larger scale. In fact you don't really have the US trading with China, you have a US company or individual, trading with a Chinese company or individual (or a British, German, Malaysian whatever) I would submit that the burden of proof would be on those who support the idea that the benefits from trade, reverse and go negative when the individuals or businesses are located in different countries. Unless you can very carefully add up all the effects, you can't say what the net benefit is. On the surface that seems to make sense, but it really isn't true. With large complex real world events its very rare that you can ever carefully add up all the effects, or even notice all of them. That doesn't mean you can't determine the general trend. Countries that isolate themselves economically tend to do poorly. Of course this is a particularly strong effect when the country is small, but even large countries have benefited from increased trade. Its very clear, just about as certain as anything in economics, that trade increases the net well being of the world, the only question is - Is this increase so concentrated that many countries (or specifically the US, if that's your focus) is worse off. Well its true we don't have a US without trade but with everything else the same to compare the current US to, but the micro effects of each trade tend to be positive for both sides of the trade (or they would not participate in the trade). The macro effects are mostly these micro effects combined. Some third party who used to participate in some specific trade may get priced out. A seller might louse out to a lower priced, or higher quality competitor, a buyer may lose out to another buyer who will pay more. But its hard to see how insulating certain specially favored buyers and sellers from competition would generally be a positive thing.