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[–]Nombre27 4 insightful - 1 fun4 insightful - 0 fun5 insightful - 1 fun -  (2 children)

[–]cisheteroscumWhite Nationalist[S] 4 insightful - 1 fun4 insightful - 0 fun5 insightful - 1 fun -  (0 children)

I have a whole section devoted to "free trade" but it's fairly easy to criticize the idea of comparative advantage. Look at Ricardo's example on Wikipedia:

https://en.wikipedia.org/wiki/Comparative_advantage#Ricardo's_example

Basically England can produce cloth more efficiently than wine, and Portugal produce wine relatively more efficiently than cloth. So, as the theory goes, the nations should agree to trade and specialize only in the goods they are best at producing. This increases the total goods from 34c and 42w, to 36c and 45w between the two countries, making both better off in absolute terms. This basic idea is a standard justification for why trade is good for economies, and very few economists agree with the idea that trade is bad. Fundamentallly, we should definitely agree that trade is good and is better for both economies than not trading, generally speaking

However, this particular model is so simplistic it is hard to know where to start. Let's just replace replace the two goods with other goods. England now has a comparative advantage in producing apples, and Portugal has a comparative advantage at producing tanks. Do you see how this might be a problem?

On it's face, it's also overly-simplistic. Obviously an economy has more than two goods. A society sustained only by wine and cloth will die very quickly. Second, the production possibilities frontier for these goods is almost certainly not linear (they are curved). I.e., you cannot convert English vineyards into textile mills easily. So, an optimal amount of cloth and wine produced by each country under a free trade scenario is at some point on a convex line, not the edge of a straight one. Third, the PPF is always subject to change owing to technological and other developments. If England suddenly develops a new technology for textile mills that doubles cloth output, then the whole equation will change.

Also, industries have externalities. Imagine your comparative advantage is in agriculture, and you are completely agrarian society in compliance with the theory. If you suddenly get into a war, then you have no industries to create tanks or planes to fight the enemy. But if you had an industrial base in something like, the automotive industry, you might have had engineers and factories that couldve been converted to a weapons manufacturing industry.

A real-world example could be presented by face masks during the pandemic. China basically manufactured all masks because they had a comparative advantage, maybe b/c of cheaper labor or whatever, and the US imported masks from China as demanded under normal conditions. However, when a global pandemic hit, China hoarded masks for themselves and the US looked retarded as they embarrassingly scrambled for masks because they didn't have the infrastructure to create enough of our own. Obviously, a sane government/society should be prepared to operate in isolation and not be reliant on foreign powers and unprepared for crises like this

[–]Jacinda 4 insightful - 1 fun4 insightful - 0 fun5 insightful - 1 fun -  (1 child)

I enjoyed reading your post and if you do manage to turn it into a series I will look forward to reading it.

I have always regarded economics as intrinsically linked to culture. I posted an article earlier about why the Japan is a refutation of neo-liberal economics. I seriously doubt that a system that works well for Japanese would work well for Westerners but it does point to how our countries could be reformed.

[–]cisheteroscumWhite Nationalist[S] 3 insightful - 1 fun3 insightful - 0 fun4 insightful - 1 fun -  (0 children)

Thanks, glad you liked it.

Japan is definitely a refutation of neoliberal economics, much to the chagrin of the western/judeo globohomo elite class. Japan basically eschews all immigration (they do have some "foreign workers", mostly Philipines) and experiment with novel economic techniques (i.e., negative interest rates) in defiance of western consent. I don't think Japan is necessarily a good or applicable model for western economics (e.g. they have many social problems, low birth rates, no military - the US ostensibly provides for their defense), but they are proof that you can have a very highly developed economy without adopting neoliberal bullshit policies.

I have always regarded economics as intrinsically linked to culture

I would go a step further and say its intrinsically related to genetics. Europeans are relatively high in openness, which is why their societies are uniquely able to tolerate "immigration" and be "multiracial" to a point, even as they are attacked and scapegoated in their homelands by more ethnocentric races for all interracial problems. This is not possible in a highly ethnocentric place like Japan, where racism (and a high standard of living) prevails

[–]Fourth_stage 2 insightful - 1 fun2 insightful - 0 fun3 insightful - 1 fun -  (0 children)

Thank you for your effort