Monday, December 5, 2016

What, in today's world, brings prosperity, peace, civility and even makes us smarter?

Let's you and I never underestimate how much America's greatness owes itself to trade. 

Don Boudreaux articulates this as well as anyone I know. I highly recommend his book Globalization.

Quoting from two of his recent blog posts below (emphasis mine):
All great and good economists – from Adam Smith to Deirdre McCloskey and beyond – understand, as the great Cannan understood, that the larger the expanse of trade and reach of commerce, the more prosperous, the more peaceful, the more civilized, and, indeed, the more intelligent are people.  Commerce kept confined by tradition, by culture, or by the force of arms to some political jurisdiction such as “the country” or “the nation” keeps the people of that country or nation poorer and less civilized.  Trade kept confined by popular and silly fevers such as the “buy local” movement to different locales likewise keeps the people of those locales poorer and less civilized.
Yet the superstitions that lead many conservatives and “Progressives” to believe that trade is zero-sum, and to suppose that successful efforts to artificially raise the incomes of some existing, highly visible national or local producers thereby raise the incomes of almost everyone within the nation or locales, endure.  These superstitions endure against all logic, against all sound economics, and against all experience.
And so all economists worth their salt must tirelessly do battle against these superstitions.
 And for those who buy the faulty notion that trade deficits matter:
Dan Griswold notes in a 2011 paper, “since 1980, the U.S. economy has grown more than three times faster during periods when the trade deficit was expanding as a share of GDP compared to periods when it was contracting”

1 comment:

  1. It's refreshing to see someone call out the “buy local” efforts for the silliness that they are. If I am obligated to buy American-made goods, then shouldn't it make more sense to buy goods produced in my state. Drill down further, and that same line of reasoning leads me to buy goods produced in my county. Oh wait, there is more than one town in the county. I should buy stuff in my town, but that neglects stuff I can buy in my neighborhood. Hmm, not many choices left as I type this on my Japanese made computer.