I had a few opinions about international trade before I read this chapter. Most of them were confirmed, but there is one that I have possibly changed my mind on - or at least it got me thinking in ways other than just being flat-out set in my opinion. This was the "unfair-competition" argument.
Before, I was "that girl" using this argument to support things like tariffs on imports from other countries who - as the textbook put it - don't play by the same rules. In my "before" opinion, I thought that if for example, a country like China didn't have any type of labor requirement then the goods produced using those unfettered methods should be taxed with tariffs to keep the playing field "fair" (good gosh, I really dislike that term).
Now I'm not so sure I'm keen on that idea.
This may be silly, but I never thought about it in terms of comparitive advantage. Adam Smith said it best when he stated "It is the maxim of every prudent master of a family, never to attempt to make at home what it will cost him more to make than to buy.. . . If a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy it of them with some part of the produce of our own industry, employed in a way in which we have some advantage."
If China can make a digital clock cheaper, why wouldn't we want to import digital clocks and focus on specializing in something in which we have comparative advantage? This is starting to make sense. ;)
The most interesting part about this chapter to me was how it stated that the gains of the winners would exceed the losses in both exporting and importing. Also that when countries trade and are able to specialize, it opens up a whole new realm of possibilities. This enhanced flow of ideas like stated in the textbook which can spur growth and push our PPF outward.
That is all for now...
Ciao!
No comments:
Post a Comment