Quotation of the Day…

by Don Boudreaux on August 26, 2011

in Trade

… is from page 14 of my late, great teacher Fritz Machlup’s 1977 book A History of Thought on Economic Integration, where he is discussing trade’s role in more closely integrating people into a single economy:

[T]he economics of the matter is the same whether it is different provinces of a state that become ‘more integrated’, or different nations within a bloc, or different blocs in the world as a whole.

Be Sociable, Share!



11 comments    Share Share    Print    Email


Kirby August 26, 2011 at 9:14 am

Or different people in a locality.

muirgeo August 26, 2011 at 10:14 am

But it’s not the same. The rules between states may be more similar than between nations and there are currency differences, cultural differences, labor differences and employment differences. And finally when all the trade and production is being done by multinational corporations who write the rules, transfer capital across borders, arbitrage labor pools and buy off politicians you are no longer talking about anything Ricardo would have ascribed to.

The Other Eric August 26, 2011 at 10:22 am

Muir I don’t disagree with you post, even phrased the way it is. You are correct in your assumptions about large agents acquiring political power in order to protect their market position.

So why is it that you support political and economic policies that give those politicians a central role, providing them with even more power?

You can’t provide any support for the one obvious mistake you made in your post– “finally when all the trade and production is being done by multinational corporations…” That is not true, and, in fact the opposite has been true ever since the creation of the Hudson Bay Company right down to Lycos a few years ago. Multinationals die faster than regional companies (their names persist for marketing reasons).

SweetLiberty August 26, 2011 at 10:28 am

I didn’t know politicians could be bought off. I thought they selflessly served the will of the people! My goodness, the way you put it, it sounds like government officials are quite corrupt.

That’s it, you’ve changed my mind, I’m no longer a disillusioned liberal. I’ll never trust the government again. Thanks Muirgeo!

The Other Eric August 26, 2011 at 10:32 am

Sorry, meant to supply sources:

Paul Oremerod’s, Why Most Things Fail: Evolution, Extinction and Economics (2006).
Benoit Mandelbrot’s The Misbehavior of Markets (2006)
Bernstein’s Against the Gods – chapters12 and 16 specifically.

And to ruin your conspiratorial view of how all capital enterprises always succeed in conquering the world just look at the recent history of world conquerors: Mitsubishi’s corporate history, Microsoft’s brief reign, etc. etc.

Still think “Big Business” runs the world like a bad movie? Skim through the book Billion Dollar Lessons.

JS August 26, 2011 at 2:54 pm

Odd for a a devoted apostle of statology. What do you think of the access GE has, and our good friend Warren?

When will you learn that power corrupts and everything that you advocate allows for the consolidation of power?

Based on what your heart and emotions feel as representative of justice, the themes associated with this site, as expressed in accordance with the individualistic philosophy held by Mr. Boudreaux and Roberts, you might find these two gentlemen as your greatest sympathizers, which in fact, they are, if you understood their approach.

You’re a decent person, but you tend to distrust the ability and desire of people to take responsibility for themselves. You insult them by suggesting that they need to be ruled. And by giving power to the rulers, which is what your ideology is essentially about, you end up with further corruption and tyranny.

Your ideology showcases your disrespect for people.

Dan J August 27, 2011 at 12:03 am

But govt is benevolent. Regulations are meant to save consumers. Flash mobs on corporations!!!


Jack Costello August 26, 2011 at 11:54 am

‘[T]he economics of the matter is the same whether it is different provinces of a state that become ‘more integrated’, or different nations within a bloc, or different blocs in the world as a whole.’

Wise words. It seems bizarre that people would think any differenttly. Has Europe not been made vastly richer by the removal of restrictions on intra-European free trade? Wouldn’t we all be even richer if Europeans were allowed to trade as freely with the rest of the world as they do with each other?

JS August 26, 2011 at 3:19 pm

The corporate elites, which seem to unnerve Muirgeo, use his philosophy to empower and enrich themselves. Yes, they write the rules. They are allowed to write them because the ideology of Muirgeo is one of ‘positivism’, which means that there is no such thing as ‘natural right’, as our Declaration elucidated. Property and the right to freedom of contract are no longer inviolable rights. Legislation is no longer limited to respecting those rights, which makes our legislative bodies ‘open to do business’ where ever they can.

Modern liberalism set the stage for legislative gluttony, or unlimited government, which translates to unlimited corruption. Muirgeo and his shallow comrades lobby for the unlimited power of statism but cry when it is expropriated for uses other than toward the satisfaction of their egalitarian and socialist wet dreams.

But due the tyrannical impulse that permeates their veins, they will never advocate anything short of state omnipotence. Their goal is to hopefully find rulers that will declare their private opinions to be law, and because this can’t be accomplished if the power of the state is limited, they are therefore against limited government.

Muirgeo hates the abuse of power only when it benefits those whom he’s opposed to. It’s fair to say that he is for tyranny and that he needs it in order to accomplish the realization of his ideology.

He’s one of thse types who’d be happy being poorer as long as those richer are brought dwn to his level of wealth too.

Austin August 26, 2011 at 9:57 pm

Seems to me that while the effects of economic integration remain the same moving up from neighborhoods to international relations, size does matter. What readings would you suggest regarding complications arising from scale (principal-agent, economies/diseconomies of scale, etc.)?

tdp August 27, 2011 at 1:13 am

Non sequitur, but: http://www.cato.org/pub_display.php?pub_id=13612

That sound was Michael Gerson and all his other nanny statist buddies getting bitch-slapped by David Boaz.

Previous post:

Next post: