Free Trade - Mixed Blessing For Countries

There are more than two countries so lets not assume that there are only two. There are more reasons to produce various goods in various places than who can do it most efficiently. The guns or butter scenario ends up with the butter producing country being taken over by the gun producing country. Economics is not a science, it is an apology producing endeavour for the rich class.

Of course the example used doesn't apply to free trade. In a free trade deal, the original chinsese doctor making 300,000 yaun would have to compete with a doctor in a poorer country earning 200,000 yaun, so he would have to drop his prices and his ability to pay a typist. His income is reduced and so is the typists. Of course, the poorer country would then have to lower its prices, further reducing the chinese doctor and typists incomes.

Free trade simply beggars the "rich" partner's workforce by providing cheap goods and labour that can be sold in the "rich" country for a bit cheaper than can be produced in the "rich" country. This eliminates employment and income in the "rich" country as we have seen with dramatic effect here in Canada.

Should the "poor" country get uppity and actually start demanding a living wage, the trade deals just move to the next disadvantaged country, abandoning the uppity country and causing even more economic hardship.

Free trade (as it is practiced) is no kind of blessing for any country, it is a curse. It is a windfall cash cow for a few, very rich, corporations and persons.

Wow, this was an awful article. Or, if that's the state of comparative advantage theory, ooo...

At the end of the article the author writes:

"Before I conclude, let me revisit the theory of comparative advantages, which suggests that free trade will benefit all trading countries. What the theory tells us is true over a long period of time and policy makers of all nations continue to try to reduce tariffs to promote free trade among all nations. In the short run, however, there are conflicting interests and problems. For instance, we do not know whether the theory will help developing countries that are not capable of producing quality products that can compete in the global market place. We also do not know exactly why the volume of intra-industry trade, such as Japan and the U.S. exporting automobiles to each other, increases so rapidly among nations when the theory of comparative advantages suggests a complete specialization."

So:
- the theory suggests wonderful things for the long term
- in practice the short term produces conflicting intersts and problems
- in practice, short term empirical data shows a marked divergence from expectations.

In other sciences, you'd go back to the drawing board.

Imagine! All things should fall up. If they fell up, simulations indicate the potenital energy of all things would increase indefinitely and life would be grand. We should get governments worldwide to agree that things should fall up. Short term empiracle evidence shows various problems amongst fall-up governments so far unexplained by the model. In many cases, in the short term, things dropped appear to fall down instead, acutally losing potential energy. In the long term, though, remember that things falling up will benefit everyone, so governments should stay the course.

Ah, economics. The only "science" that tells the world what it "should" do.