Political Boundaries Are Not Economic Boundaries

by Don Boudreaux on October 28, 2006

in Myths and Fallacies, Trade

The very insightful Will Wilkinson makes this important point at his blog, The Fly Bottle:

Today’s fallacy nominee is “the United Nations Fallacy,” which is the
error of assuming that supericially similar activities that take place
inside two or more political jurisdictions may be usefully compared
simply because those jurisdictions are each recognized as “nation
states” by the United Nations. For instance, the United States of
America has “an economy” and Liechtenstein has “an economy,” so let’s
compare them! Suppose tomorrow the state of Iowa and the city of Osaka
are declared sovereign nations by the United Nations. Would it suddenly
make good sense to compare their levels of birth defects, their GDP,
their relative levels of “social capital”? If so, why don’t we do it
now? If not, why do we compare the U.S. to Liechtenstein, Mauritius, or

Here’s my earlier take on this same issue.


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