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politicophile · 11-11-2005, 02:23 PM

Free trade benefits all the nations involved.

I would be happy to go into details about why this is so, but your rant against removing barriers to trade is fairly general, so I'll just give a basic overview. To begin, in the Haitian rice farmers example, you are correct that it costs more to import nearly all the country's rice rather than just a small fraction. What you are leaving out of the equation is the cost to consumers to buy the rice sold at an unnecessarily high price by local farmers. The imported rice is obviously cheaper than the domestically produced rice, or nobody would buy it. Thus, despite your true but misleading claim that import costs rose, the consumers in Haiti need to pay less to buy their rice, which is a staple.

On the down side, all the Haitian rice farmers go out of business. In countries where agriculture is the major source of employment, this kind of undercutting can be devastating. In the short term, farmers will lose the means to support themselves. In the long term, Haiti will begin to produce a different sort of good that is comparitively advantageous.

The end result will be that the output of Haiti's rice industry will be replaced with goods imported from another country that were made more efficiently. Haiti will develop a different export that they can manufacture with comparative advantage to other nations. Thus, using the same resources, more goods are produced and the consumer receives them from lower prices.

And as for the NAFTA riots, there will always be liberal college students who don't take economics courses. White American college students always seem to know what is best for people living in third world countries.

11-11-2005, 02:23 PM	#3 (permalink)
politicophile Addict	Free trade benefits all the nations involved. I would be happy to go into details about why this is so, but your rant against removing barriers to trade is fairly general, so I'll just give a basic overview. To begin, in the Haitian rice farmers example, you are correct that it costs more to import nearly all the country's rice rather than just a small fraction. What you are leaving out of the equation is the cost to consumers to buy the rice sold at an unnecessarily high price by local farmers. The imported rice is obviously cheaper than the domestically produced rice, or nobody would buy it. Thus, despite your true but misleading claim that import costs rose, the consumers in Haiti need to pay less to buy their rice, which is a staple. On the down side, all the Haitian rice farmers go out of business. In countries where agriculture is the major source of employment, this kind of undercutting can be devastating. In the short term, farmers will lose the means to support themselves. In the long term, Haiti will begin to produce a different sort of good that is comparitively advantageous. The end result will be that the output of Haiti's rice industry will be replaced with goods imported from another country that were made more efficiently. Haiti will develop a different export that they can manufacture with comparative advantage to other nations. Thus, using the same resources, more goods are produced and the consumer receives them from lower prices. And as for the NAFTA riots, there will always be liberal college students who don't take economics courses. White American college students always seem to know what is best for people living in third world countries. __________________ The peculiar evil of silencing the expression of an opinion is, that it is robbing the human race; posterity as well as the existing generation; those who dissent from the opinion, still more than those who hold it. If the opinion is right, they are deprived of the opportunity of exchanging error for truth: if wrong, they lose, what is almost as great a benefit, the clearer perception and livelier impression of truth, produced by its collision with error. ~John Stuart Mill, On Liberty