The Economist
"Suppose that the “fair traders” succeed in eradicating international differences in production costs, so that a given product cost precisely the same to make in different countries. In that case, no country would have a comparative advantage, and hence there would be no trade. Rich-country workers, who are also consumers, would lose."
What a selective example. Yes, so in the rare case that EVERY country in the world produces the EXACT same goods at precisely the same amount of time and labour, we're screwed. Even that's flawed, because consumption values would be obsolete-- there would be no PURPOSE to comparative advantage because no one would NEED to consume more in the first place. Secondly, in the realistic case that countries DO produce different goods, and in the case that they are of equal cost, does not mean that countries stop trading altogether. Just because productivity levels off, doesn't mean trade stops-- after all, trade isn't exclusive to specialization and efficiency in its purpose. Trade also means the ability to trade one good for another; so why wouldn't those countries trade? I think if country A produces x amount of good A for every y amount of workers, and country B produces x amount of good B for every y amount of workers, people in country A would still want good B, and vice versa-- unless it's assumed that they produce the same good, and that every country in the world produces the exact same goods, which is absurd. OR unless somehow, country A hates goods from country B, which would make trade non-existent in the first place.
I hate how "fair traders" are put right in the middle of this when they address differing topics. The main assumption made here is that somehow, if world A comprising of countries 1,2 and 3 produce the EXACT same goods in each country at the EXACT same cost, that spells disaster. But what is disastrous about countries that are all equally efficient in costs?...
You tell me.
What a selective example. Yes, so in the rare case that EVERY country in the world produces the EXACT same goods at precisely the same amount of time and labour, we're screwed. Even that's flawed, because consumption values would be obsolete-- there would be no PURPOSE to comparative advantage because no one would NEED to consume more in the first place. Secondly, in the realistic case that countries DO produce different goods, and in the case that they are of equal cost, does not mean that countries stop trading altogether. Just because productivity levels off, doesn't mean trade stops-- after all, trade isn't exclusive to specialization and efficiency in its purpose. Trade also means the ability to trade one good for another; so why wouldn't those countries trade? I think if country A produces x amount of good A for every y amount of workers, and country B produces x amount of good B for every y amount of workers, people in country A would still want good B, and vice versa-- unless it's assumed that they produce the same good, and that every country in the world produces the exact same goods, which is absurd. OR unless somehow, country A hates goods from country B, which would make trade non-existent in the first place.
I hate how "fair traders" are put right in the middle of this when they address differing topics. The main assumption made here is that somehow, if world A comprising of countries 1,2 and 3 produce the EXACT same goods in each country at the EXACT same cost, that spells disaster. But what is disastrous about countries that are all equally efficient in costs?...
You tell me.