Trade and Romance

by Don Boudreaux on January 7, 2007

in Trade

Talking about winners and losers from trade is much like taking about winners and losers from romance.  Nearly everyone of us has had his or her heart broken at least once.  And yet the typical person, even after enduring genuine pain from the unwanted transfer of The Other’s affections from him or her to some (often despised) rival, returns to action, looking to receive love in exchange for love to be given.

Suppose that Joe’s much-loved wife, Jane, just left him for another man.  We don’t abuse language by describing Joe as "a loser" in the game of love.  But we clearly here refer only to Joe’s immediate situation.  He is suffering now.  He has just endured a genuine and painful loss.

And yet, is he truly a "loser" at romance?  This question isn’t absurd.  After all, when he was dating Jane he likely ousted some other identifiable man or even men from the potential of enjoying her amorous affections.  So if we look at the longer, fuller time span, we see that Joe "won" earlier and "lost" later.  Indeed, only because Joe initially won Jane’s hand was he able to lose it later.

None of the above, of course, will heal Joe’s broken heart as he watches Jane walk, luggage in tow, out of the door, her toothbrush already at Hank’s house.  Joe will likely hate romance at that moment, and for many moments afterward.

But even if Joe fails ever to find another woman to share his affections, it’s inaccurate to describe him unambiguously as a "loser" at romance.  He was once a winner — and he might again win on another go-round.  And, of course, he owes his very existence to romance.

Like all analogies, this one is imperfect.  Dear Readers, be assured that I’m aware of the many imperfections.  Still, the essential similarity remains: not only did romance create each of us, but almost all of us who "lose" at it lose only what we previously won.  And how many of us, recognizing the frequent and deep and undeniable pain that romance often causes, would argue that this downside of romance makes romance a curse that we would be better off, all of us, to avoid?

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triticale January 7, 2007 at 8:10 pm

Whilst I agree 'tis better to have loved and lost, in all probability some readers of this post are here because of raw animal lust.

Swimmy January 7, 2007 at 8:52 pm

This is one of my favorite entries yet.

Rodney A Stanton January 7, 2007 at 9:44 pm

Were I jo I would consider myself a "loser". Depressions are hard to tolerate no matter how goood the following boom may be. Sometimes depressions do not lead to a boom which is why we try not to have them any more.

Thr pain of a depression can also lead to very bad side efects: The takeover of Germany by the Socialist Labor Party, Bill Clinton's election, Iacoca taking over Chyrsler (which got the taxpayer bailout from Carter and did well while we were covering their debts; but tanked when Ronnie said the added interest to American debt was too steep a price and made Lee assume the burden of his debt.) which in turn resulted in its death and takeover by Daimler.

kebko January 7, 2007 at 10:45 pm

I think the root of the problem here, as with much incorrect conventional wisdom about economics, is the essentially marxist viewpoint that most people have of capitalism – that it is a system where capital exploits labor. If capital is in the business of systematically stealing from labor, it must be because it has some oppressive control over it, so that laborers do not have control over their own destinies.

In your analogy, this view would be represented by the misogynist who would suggest to Joe that women are nothing but trouble & will only use him & break him. Most of us recognize that Joe has the power to love again, and that there are women out there who would be positive characters in his life if & when he finds them. But, the marxist/misogynist would advise him to not let himself get so attahed, and to keep a distant control over his women before they can get control over him.

Cygnus January 7, 2007 at 11:28 pm

The curious thing is if Jane leaves Joe for Hank and it is all good – Joe isn't a loser. However if Jane leaves Joe for say Manuel or Jose or any other foreigner then its a serious issue – Poor Joe losing to a Mexican! The horrors of Romance!!

The whole protectionist arguments seem to be steeped in anti-foreign bias. I can't help but think that american protectionist policies are responsible for a large amount of anti-US sentiment in the world – far more than the war on terror that everyone loves to blame it on.

Calca January 8, 2007 at 12:05 am

As you say there are problems with this analogy. A big one I would say is the institution of marriage which fixes people into always buying romance from the same source and inflicts heavy punishments for changes of mind….


Brad January 8, 2007 at 12:46 am

Three words: multi-lateral trade agreements.

Hasan Jafri January 8, 2007 at 6:15 am

Umm, is there room here for Joe-Jane-Hank triangular arbitrage? If marriage is a monopolistic cancer gnawing at the heart of romance (like OPEC in oil and Wal-Mart in retail), then surely there is a way to squeeze an extra divident out of a sideways trade?

lowcountryjoe January 8, 2007 at 6:53 am

I cannot wait for the tortured logic of the protectionists who post here to come pouring forth. There will undoubtedly be someone who brings up contractual obligations and draw the paralell with taking vows or that somehow this was an intellectual property right's violation. The bottom line for Jane is that Hank brings more satisfaction than does Joe. Perhaps Joe should have been more attentive.

undergroundman January 8, 2007 at 7:05 am

The major difference is that when one loses at trade (gets an unfair deal, you mean, or simply doesn't get the chance to trade?), they have to deal with empty bellies, dead children, ect, at the worst, and at the least they suffer. Obviously it's always been the case that the people who deserve to suffer least suffer the most in trade agreements – can you even argue against that?

When I lose at romance I just feel bummed out for a while (though it could make me depressed to the point of suicide – I'm not exaggerating).

In the meantime we devote our considerable resources toward entertainment, gluttony, and in some cases healthcare – is it really more ethical to spend tons of resources on old people when there are more young people who desperately need the help?

pelkabo January 8, 2007 at 7:08 am

Protectionists are in effect asking Uncle Sam to be a pimp, procuring companionship for Joe from women who really would prefer to associate with someone else.

undergroundman January 8, 2007 at 7:34 am

Assuming that you are talking about protectionism and not unfair "Free Trade Agreement" deals – what do you think about the theory that protectionism is necessary in order for an industry to build up?

Is a company from a Third World going to be able to compete with the world market right off the bat? Of course not. But maybe after serving their country for a few years they will, with help from the outside. Historically all the developed nations have used protectionism to bolster their developing industries – if the US hadn't used them against England, we arguably wouldn't have surpassed England as fast as we did. Instead we'd be simply exporting raw materials because "that's where our competitive advantange" lies.

That's not to mention that "free trade" is hardly ever free, with all the subsidies and other crap around.

Think about it.

By the way, I attacked healthcare but I should have attacked our military spending. It is reprehensible any way you look at it.

faultolerant January 8, 2007 at 9:53 am


No, military spending is not "reprehensible any way you look at it". That's your opinion, and you're entitled to it, but it's not a "fact".

save_the_rustbelt January 8, 2007 at 10:18 am

I have the cure to this problem.

Every worker who loses a job to trade will change his/her name to Halliburton, and then will be paid billions of dollars for shoddy work.

Cheer up, we are now going to have a jobs program – for Iraqis.

This is like an episode of Seinfeld – without the humor.

Leviathan January 8, 2007 at 10:25 am

You are complaining about what does happen as compared to what should happen.

Your point?

Half Sigma January 8, 2007 at 11:02 am

I think this is a misogynist post which denigrates women to objects of sexual gratification who are "won" or "lost" by men.

Leviathan January 8, 2007 at 11:18 am

All choice is a function of discrimination and competition.

lowcountryjoe January 8, 2007 at 12:33 pm

"I think this is a misogynist post which denigrates women to objects of sexual gratification who are 'won' or 'lost' by men."

Is this real sentiment from you? Consider changing the geners and names for this analogy then…does that make it better for you? Or will you then counter with, "look, the guy is a pig for keeping his toothbrush at his mistress's house." If anything, the anolagy as it stands makes Joe look to be a putz who Jane tired of. Jane, in this analogy had free will and opted to take her attributes — whatever they may be — and share them will someone else who, presumably, bring more to the table. Jane is not denegrated…hell, Jane is empowered! Do you not see this? Do you not see how Jane is the empowered consumer who has choices and leverage?!

Fundamentalist January 8, 2007 at 12:54 pm

This is an excellent analogy for combatting trade obstruction because the anti-trade argument is an emotional one, not a logical one. You can't counter an emotional argument with data or logic; it requires another emotional argument, first, followed up by data/logic.

Fundamentalist January 8, 2007 at 12:57 pm

The the Michigan person who complained about closing factories in the previous post, we might point out that most of those "lost" manufacturing jobs probably went to states in the southern US, particularly Tennessee and Texas, both of which have new Toyota plants.

Bill January 8, 2007 at 2:16 pm

Say you get dumped by your spouse for someone 25 years younger when you are 60. You lose your health insurance and 50 percent of your retirement savings, and your expenses increase.

I think this is a rpetty good analogy to your company and your retirement benefits evaporating when you are 60 because your company was pushed out by competition.

Yes, you were "winning" the whole time you were married or working, unless your main goal was to raise the kids and work for retirement. In the end, though, you still "lost." I'm not saying that such cases, which are not the majority, mandate super protectionist policies, perhaps just a modest safety net, like we have. Let's not pretend it isn't a terrible thing to go through, or that the options you are left with are meaningful and promising.

Sometimes I think the best argument free traders can make is: yes, it will be bad, really bad for some, at least for awhile, and possibly for their whole lives. Some of these people will clearly, and by all objective standards "lose." However, the alternative is protectionism, which we have good evidence to show is worse for all, most of all those people in other countries who stand far more to gain, and who are currently worse off than even "our" biggest losers.

Jim January 12, 2007 at 2:54 pm

I would like to reply to the infant industry protection post above.

The argument that a protectionist policy should be put in place to foster a company in it's infancy stage would rest on the assumption that once the company has matured it will be able to stand on its own and produce a benefit above the cost that government/taxpayers (through a subsidy)or consumers(through tariffs/higher prices) were asked to bear. If this assumption is accepted, then wouldn't it be in the interest of the owner's of the company to bear the initial losses under the expectation that they will be compensated by future benifits?

The only argument where protection would be necessary would be that the venture is too risky and has a low probability of producing benefits in excess of the cost, so the owners will not be willing to risk their capital. The protectionist policy simply shifts the burden of risk to the taxpayer or consumer. In addition, the capital that was used for this company is no longer available for other, more efficient, purposes. The argument for protection works, since people see the new company and the new goods/services/employment it produces. They don't stop to think of the more efficient uses that would have resulted to produce other goods/services/employment, if this capital were not tied up in the protected company. I would assert that in the long run, protectionist policies to foster risky ventures would result in a net loss to society.

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