CA is not some vague hand-waving argument. It can be quite simply laid out and understood mathematically with very basic noncontroversial assumptions.

If you have an MD, then I presume you have at least a linear algebra education in mathematics. It is quite easy to lay out the 2 person multiproduct case, and almost trivial to lay out the 2 person 2 product case. When you do, you will speak differently about CA.

You sure about that?

http://en.wikipedia.org/wiki/Economy_of_Ethiopia

Markets are essentially solving all the problems liberals have devoted their lives to forcing people into with governments, while the rest of us are actually enjoying the relative ease at which capitalism has given to our lives.

Please understand that “free trade” creates maximum wealth. It does not matter if the trade is only partially free. The more interference, the less wealth produced, and vice versa. This is proven fact if you study theory. It is not opinion. Nor, as some here have mused, is it ideology.

Now, if someone wants to defend free trade on moral or ethical grounds, that would be a different matter. That would be an ideological argument unrelated to the utility of free trade.

Your entire first paragraph is irrelevant to the point I made. Despite any and all market interference, if their all still advantages remaining, then greater total wealth is produced for “both” the buying and selling nations then if the exchange was forbidden.

It’s a fact, but you need to study economics to learn it. I have forgotten more about economics than you’ll ever learn. You may want to try Bastiat or Hazlitt, since you are obviously lazy. You wouldn’t understand “Human Action” or Rothbard’s “Man, Economy, and State”.

What causes you to make such assertions on this blog without even the tiniest effort to validate your assumption? Why do you continue to make such untruthful statements?

If you want to know anything about concentration of wealth during the first century of this nation’s existence, just go to Google and type in any one of these names:

John Jacob Astor
Cornelius Vanderbilt
Stephen Girard
Alexander T. Stewart
Stephen Van Rensselaer

As important and beneficial as trade is for the citizens, it can be detrimental to the ruling political elite. It becomes harder to use “us vs. them” conflict and threats of war to keep the citizens in line when you depend upon the target of your wrath for critical goods.

WallMart’s China trade has helped prevent out military industrial complex and China’s military complex of using each other to get drastic budget increases.

“Let’s examine what would happen if consumers changed their behavior in order for jobs to be saved. The first thing they would have to do is to buy everything at the highest possible prices.”
This is silly hypothetical and the discussion that flows from it is not interesting or educational. Economics is not a science like math. Instead, most economists use math to create models to illuminate what might be happening in the real world. Unfortunately, the real world is messy, the models have often do a poor job of explaining what happens in the real world, and it is generally impossible to set up macroeconomic experiments to test economic theories. Based on your essay, I suggest you not accuse others of being ignorant about economics.

You’re taking an unusual amount of interest in my purchases, vidyohs.

RE: “It doesn’t matter to those socialist fools that conditions are different in various places and flooding money into an area that has an established economy will just cause pain, envy, jealousy, and disruption to those areas.”

So what would you propose, vidyohs? Preventing “these areas” from commanding as high a price as they can because you benevolently want to spare them “pain, envy, jealousy” etc. etc.? I’m not sure why getting paid more will cause all that pain. If you really think so, you can feel free to mail half your pay check to me.

Socialism is about that faiiiiiiirness and eqqqqqquality (said in the nasal thin whiny voice). Your fair trade coffee is coffee that is bought at artificially jacked up prices which came about in response to pressure brought by those who just have to impose faiiiiiiirness and eqqqqqquality to the whole world and to do it now, so they can feeeeeeeel good about themselves. It doesn’t matter to those socialist fools that conditions are different in various places and flooding money into an area that has an established economy will just cause pain, envy, jealousy, and disruption to those areas.

But, hey, what hell the fools who push this socialist shit don’t have to live with their results, they live in cushy good ‘ole USA. But, they can feeeeeeeeel so good about themselves.

People like DK.

I wrote a brief argument against protection that I will include here. The fallacy is to think we must pay more for something in order to “save jobs”.

“Protectionism:
Even greater wealth accrues to a society that trades with other societies. The division of labor within a society is no different than the division of labor globally. Protecting jobs in America from foreign competition is no different than protecting jobs in one city from being lost to another city. It is no different than protecting the original farmers from competition from those with more fertile land. Protectionism means to protect a company from failure by not allowing consumers’ choices to decide who should succeed and who shouldn’t. It is accomplished politically by distorting the voluntary exchange of property by tariffs, taxes, quotas, penalties and other compulsory measures.

Let’s examine what would happen if consumers changed their behavior in order for jobs to be saved. The first thing they would have to do is to buy everything at the highest possible prices. This would guarantee that inefficient companies would remain profitable and not shut down causing unemployment. But if we did that, we would discover that we couldn’t buy as many things as we do when we seek lower prices. We would have to make a decision of what not to buy that we used to buy before. Once everyone does this, fewer products are made for the society and people lose their jobs making those marginal products. In this case, man has taken a step to undo the division of his labor.

The remaining companies that manufacture essential products are no longer able to find in existence the myriad of marginal goods and services that saved them labor, so they are forced to employ people instead to do things manually. This causes the prices of what they make to rise. Once that happens, the consumers are faced again with making a decision not to buy something, because at the end of the day, they have less money left over than before.

If everything cost more to produce and we always paid the highest prices for everything we bought, we would continuously have to buy less goods and services than before. This process continues until man’s division of labor becomes completely undivided. Eventually, we descend to a tribal existence where each tribe is self sufficient in providing for their totality of needs without the assistance of trade and exchange. Nobody would have anything except their job producing bare essentials for themselves. But, thank God, we would have full employment!

By Americans being free to buy whatever and wherever they want, the savings experienced is the creation of wealth. New capital investment is then possible, and labor is increasingly divided to provide new goods and services. Those who advocate otherwise, advance a case for the creation of poverty instead.”

It has nothing to do with the discussion revolving around me – I was responding to something YOU brought up.

I want World Peace(tm). According to you, it’s perfectly acceptable to kill every human being to achieve that.

I suggest you check yourself in your local psychiatry ward. Your megalomaniac tendencies are tiresome.

Riiiiight. Same for Canada and “modern” European states. There’s no concentrated wealth there.
You aren’t aware of it, so it must not exist. Is that how it works?

Their were no fabulously wealthy Americans during the first 100 years of our nation and we grew just fine with out the “benefit” of concentrated wealth.

The modern European states and Canada have great success as well with far less concentration of wealth and power.

The means are simply having rules that prevent the massive accumulation of power and wealth.

In the end there will be no escaping Darwinism. But I’m of the belief that we are different from the other species in that we are able to plan for the betterment of the group and gain advantage by group planning. You all are of the belief that we got here via a system of anything goes, every man for himself rugged individualism and NO group planning is needed. America and the social democracies of the world are superior because we’ve group planned and cooperated better then the non-planning nations and civilizations.

Sure in Ethiopia the means of everyman for himself are intact as you might wish but the ends SUCK… even for those in power.

Even taking Bourdreaux’s fanciful example seriously, there may be a benefit for the Clemson to threaten to not shop in Seneca: If, as a result of the threat, Seneca resumes a more rational shopping strategy, both Seneca and Clemson would gain. Thus, a retaliatory threat may result in lower overall trade barriers. GATT and WTO agreements have been negotiated through the exchange of reductions on trade barriers. The WTO’s enforcement mechanism is to allow retaliatory trade restrictions. These institutional mechanisms suggest that threatening to impose trade restrictions can actually be an useful means of decreasing trade restrictions.

In case anyone has the wrong idea, I generally favor freer trade and do not support the decision to increase tariffs on Chinese made tires. But I also do not favor silly arguments, such as the one made in Boudreaux’s letter.

(A more challenging hypothetical would be: Seneca and Clemson each have a software company that produce competing computer programs. It costs $1m to develop and market each program, but very little to distribute and sell additional units. Each program is, in general, equally useful, but have some different features different users prefer. If Seneca’s residents “irratoinally” support their home-town company’s program, or Seneca’s government restricts the import of Clemson’s program, what happens? Seneca will be able to sell its product in Clemson at a price that Clemson’s company cannot profitably match and the Clemson company would go out of business. The Clemson employees are displaced, competition is reduced, and a high-growth shrinks in Clemson. If Clemson was faced with a Seneca software-tariff, what is the appropriate response? Such a story probably does not have much application to a narrow market, such as tire manufacturing, but it may be important in some industries. )