8cda82da_brary_of_Economics_and_Liberty__ast_Highlights_HIDE_HIGHLIGHTS
[Time] 14:00
Smith-Ricardo interface, Buchanan and Yong Yoon's paper. Not all equally good at all tasks, so it matters how people get allocated to tasks. Most effective is to have people do what they are most productive at, where "most productive" doesn't mean what you are best at, but who has the lowest opportunity costs, what you forego. That's the Ricardian insight, size of pie today. That specialization gives rise to capital, and thus induces growth, Smith's insight. People who are put out of work, either by trade or application of machinery, both of which do the same things: make us wealthier but harm a particular group of people who are put out of work for a while. Boudreaux: that's the wrong language, but why? Time perspective. "Trade hurts some people"--e.g., the steel worker--misses the fact that the job the steel worker lost would not have existed had it not been for trade. Blog: man loses wife, who leaves him for another man. In a longer time perspective, he probably won the wife to begin with from some other man, so do we say that love has good sides and bad sides? Change inherently has unanticipated surprises, some good, some bad. Buy land in Montana and live without much trade, can forget about currency values, etc.; won't be buffeted by economic change. But can't escape change in weather; and either way you'll be dirt poor. And maybe dead. Jim Buchanan, constitutional bargain: agree to become part of this worldwide exchange nexus, and we get wealth that would otherwise be impossible. What we give up, our willingness to play by the rules: consumer sovereignty and entrepreneurial dynamism are critical to driving economic growth and material prosperity. We agree to adjust ourselves. In any one case, you can defect. Seems like a noble thing, John Edwards, Republicans as well; but if everyone does it there would be no growing prosperous society. Playing by the rules means you do not stop consumers from taking better deals.
Don Boudreaux on Globalization and Trade Deficits | EconTalk | Library of Economics and Liberty