Economics is Fun, Part 13: International Trade

[Chris]

Previous Economics is Fun topics...


Part 1: Value
Part 2: Price
Part 3: Specialization
Part 4: Trade
Part 5: Time
Part 6: Money
Part 7: Middlemen
Part 8: Speculators
Part 9: Joint Enterprise
Part 10: Taxation
Part 11: Competition
Part 12: Banking

[Conley]

Governments don't trade, people do.

Great story of the attempt to price control on the candle makers. His description of the multinational jeans makes me think of our own domestic auto industry, with American cars being made in Mexico and Honda and Toyota having factories here in the U.S. There's no reason for us to emphasize and pay extra for our own auto industry when we can save money buy buying foreign, just like Adam Smith's point about making one's own wine or buying it from the French and pocketing the money one saved.

[Chris]

Right, people trade, governments try to manage trade.

Your second paragraph is about comparative advantage.

[Chris]

SO the question in light of this is what does it mean for the US to have a trade deficit?

[Peter1469]

If the US builds its own manufacturing base, then yes, trade as widely as possible.

But don't forsake your own manufacturing and piss on us while asserting that it is raining.

[Chris]

If the US builds its own manufacturing base, then yes, trade as widely as possible.

But don't forsake your own manufacturing and piss on us while asserting that it is raining.

Not real clear on your point, what do you mean "US builds"? Can't be government, right? So how sell individuals to do this?

[Conley]

If the US builds its own manufacturing base, then yes, trade as widely as possible.

But don't forsake your own manufacturing and piss on us while asserting that it is raining.

The U.S. is still the top manufacturer in the world by some measures and at worst number two. It isn't that we don't manufacture anymore, it's that we've become more efficient at it so there are fewer manufacturing jobs. The manufacturing is still happening here.

[Conley]

Not real clear on your point, what do you mean "US builds"? Can't be government, right? So how sell individuals to do this?

I take it to mean the nation, not the government.

Certainly though, government can make the environment much more conducive to the creation of manufacturing centers.

[Chris]

OK, so the nation of individuals, since there is no collective.

Agree, government can get out of the way by making the US a tax haven for investment and entrepreneurship in manufacturing here.

[Peter1469]

Not real clear on your point, what do you mean "US builds"? Can't be government, right? So how sell individuals to do this?

In the common sense of the term.

Of course it is businessmen building the businesses and government applying proper regulations and tariffs to allow our markets a chance to grow.