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

To: TimF who wrote (261041)	4/8/2008 8:38:37 PM
From: neolib	Read Replies (1) \| Respond to of 281500

Economic papers tend to be more balanced than the political discussions of economists. Unfortunately, I tend to read the Think Tank economists, not peer reviewed journals. I guess I get what I deserve. 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? AFAIK, all trade, from individual through global makes sense only in the context of competitive advantage. If each individual could be a jack of all trades better than his neighbor could specialize in anything, we would not need any trade. What I find unhelpful is an economist saying that trade deficits don't matter, I should just enjoy the increased standard of living I get from cheaper products. The correct way to make the argument would be to say: We should retreat from this field, because they can do it better (i.e. cheaper) and instead concentrate on this other field, because we can do it better, and this resulting specialization is a net boost for everyone. But economists very seldom frame the discussion in that context. Even when they do, the issue then becomes whether one should be concerned about which fields you lose competence in vs. which ones you gain it in. Does a decrease in manufacturing vs an increase in services have any other long term effects besides the net employment and wealth effects? I say yes, it clearly does, but I think many economists would argue the opposite. One of the obvious ones to me is in technology, especially military technology. If we lose most semiconductor fabrication to China, we will eventually lose most semiconductor design to China as well, and China's military will benefit greatly from that while ours will be greatly harmed. Not that I'm not saying we will, I'm saying IF... 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 Sometimes yes and sometims no. BTW, this is exactly the problem with AGW. The uncertainty is in the details. At many levels, one can make sweeping claims and make it look like CO2 either does or does not impact global temps. It is rather fascinating to read the history of GHG science, because the initial conjecture, while supported by some basic physics, looked like it was refuted by some other simply physics, and so on... It is only by very careful accounting that we can figure out if CO2 is shifting the thermal balance by a few watts/m2, or for some forcings (solar irradiation) by a fraction of a w/m2. To make attribution, scientists have had to get very accurate and that is often difficult. IMO, economist face the same problem. If you want to wiggle tax rates by a few percent you need to be able to show the expected effect. Not easy. While I generally agree with you regarding the benefits of free trade (I am pro trade even if I don't sound like it sometimes) the one fundamental negative I see is concentration. The larger a potential market becomes, the more likely IMO, that a single player might capture the market because of economies of scale. My primary concern with this is that it is a dynamic alien to the rest of biology, hence I don't think one that has been evolutionarily vetted very well. A somewhat esoteric notion, I'm happy to admit.