Tuesday, March 17, 2020

Vox Popoli: A desirable extinction

And long overdue. If the primary casualty is globalism, the winner is humanity:
Globalists May Soon Become an Extinct Species

The disruptions caused by the spread of the coronavirus mean supply chains will be moved closer to home rather than in foreign lands.

The coronavirus’s depressing effects on the global economy and disruptions of supply chains is no doubt driving the last nail into the coffin of the globalists.

They believe in the theory first articulated by Englishman David Ricardo (1773-1823) that free trade among nations benefits all of them. He argued for the comparative advantage of free trade and industrial specialization. Even if one country is more competitive in every area than its trading partners, that nation should only concentrate on the areas in which it has the greatest competitive advantage. He used the example of English-produced wool being traded for French wine—and not the reverse.

But Ricardo’s simple trade model requires economies in static equilibrium with full employment and neither trade surpluses nor deficits, and similar living standards. These aren’t true in the real world. Also, Ricardo didn’t consider countries at different stages of economic development and different degrees of economic and political freedom, or exchange rate manipulations and competitive devaluations since gold was universal money in his day.

Ricardo also didn’t factor in trading partners with huge wage differences such as the U.S. and China.

Corona-chan is demonstrating the truth of Big Bear's sophisticated critique of free trade. Ricardo retardo. Thank you, Corona-chan!