agman said:
Tommy said:
agman...It was over your head then and it most ceratinly is now. You cannot even explain my position correctly. No wonder you are so confused.
Please explain it to the rest of us agman, or do you think it will be over all our heads? Surely there are some of us out here that are smart enough to understand, but probably not in your thinking.
I am certain there are many on this forum who are smart enough to understand my explanation which was merely an example of the benefit of "Comparative Advantage" in trade. That evidently is new to you or you would not need any further explanation. I suggest you could learn from this statement by Adam Smith in the "Wealth of Nations" Adam Smith wrote in "The Wealth of Nations"...
"If a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy it of them with some part of the produce of our own industry, employed in a way in which we have some advantage. " (Book IV, Section ii, 12)
The idea here is simple and intuitive. If our country can produce some set of goods at lower cost than a foreign country, and if the foreign country can produce some other set of goods at a lower cost than we can produce them, then clearly it would be best for us to trade our relatively cheaper goods for their relatively cheaper goods. In this way both countries may gain from trade.
You might also want to read David Ricardo's book "On the Principles of Political Economy and Taxation". You might even learn something beneficial for a change Tommy.
The only addition I made to my explanation was to turn imported raw lumber into 2X4's, thus adding more value creating the possibility of exporting that added value. Is that so difficult to understand? Have you never heard of JAPAN? Enough said on this subject-you can learn the rest on your own if you have a genuine interest other than tagging along as a cheerleader with Sandhusker.
Agman, your misuse of Adam Smith and Ricardo is amazing. Just as the gun arguments over marketing agreements have shot yourself if the foot, so too has your lack of reading comprehension of these two pioneers of economics and world trade.
Do you think by just quoting these guys you have a higher standard of credibility? You must also have good reading comprehension and an intelligence that goes beyond the first grade.
Since you have brought up Ricardo twice (the first time I let is slide) let us take his arguments and how you seem to be a little mixed up. If need be we can go through an example to illustrate the points and if anyone would like a more detailed explanation posted, please send me a pm and I will try to work it in. Short of that I will go straight to the point of the free trade arguments.
In Ricardo's book there are some assumptions made about free trade. One of the main assumptions is that free trade is trade between individuals and that this free trade voluntary. If we take our industry for example, we see how these assumptions are not holding. How voluntary is telling the Japanese to forgo their sovereign right to food safety and adopt some mickey mouse "world body" standard that is lower than their own? How voluntary is it to threaten sanctions against them if they don't go along with lower food safety standards (bse testing)? The right not to trade is as important as the right to trade. The current situation in international beef trade typifies the fallacies you try to push.
Point number two, is the "free trade" in this scenario between indiviuals or between corporate oligopolies? Is it in the best interest of Japan to sell out its sovereign rights to these large business behomouths?
In the case of beef, since you bring it up, agman, the international beef trade is in the interests of big packers and their supply chains, not the domestic producers. We have allowed the middlemen to make free trade arguments for their own profit, not for the profit of the producers and other interests in a society.
What middlemen in trade do is arbitrage the differences between countries for their own benefit. They sell this as "free trade" when in reality they are the ones profiting. What do producers get in exchange in the beef trade, agman? Cheap fillers for ground beef and lower quality (select) meat being sold at walmart on price that has to be pumped up with artificial ingredients and gas to even make the apperance look good to customers? They are doing to beef exactly what happened in the red delicious apple market. They are ruining it just to make a buck. How has that helped consumers or producers?
On trade with China. The U.S. manufactoring and producer segments have been the real losers with "global trade". Cheap chinese labor is replacing U.S. labor in these instances while the intellectual rights to the products and to the production systems is being stolen by the chinese with no chance of restitution. Traders (Walmart) are benefiting. Another beneficiary to this trade is the overspending administration. When we arbitrage labor and give away the intellectual property from the the U.S. with chinese labor and backwardness we do get products at a lower cost. This benefit comes at the cost of the U.S. worker. Sure the goods are cheaper. This is another benefit that comes with the trade. This suppression of prices through this arbitrage would seem to be beneficial to both sides but in fact, by trading with the chinese, we are allowing their repressive regime to benefit. They have unleashed the benefits of limited capitalism while we have, by allowing suppression of the producer surplus by market power, have moved towards it.
The "free traders" have arbitraged the differences between the U.S. and China to the benefit of the chinese and the traders as well as a suppression of the inflation rate that the overspending Congress benefits from. Producers are left holding the bag. We have higher taxes in in this instance, but the producers are the ones paying for these higher taxes.
Go read Ricardo again, answer Sandhusker's questions, and stop selling out producers in this country for your own self interest, agman.