Is Economy about trading or about transferring?

corps sell stock, people buy it, I guess one could call that a transfer, kinda like printing money

 

Nope. I'm referring to econometric analysis, originally commissioned by Oxfam. Its also confirmed ironically by the World Bank

 

Well, because I want to attack it, of course. I don't want to attack my understanding of it, because, if it turns out that it isn't the same as yours, I will have wasted my time.

Why don't you just explain what it is about conflict theory that dictates that a primitive economy must become worse off by trading freely with a more developed economy.

 

Then get going! Try and reject the distinction between static and dynamic comparative advantage. Try and reject the 'kicking away the ladder' approach to economic history

 

Under that analogy, I meant to say that the end user takes an immediate loss with the intrinsic value of the item. The expressed value of the item has no value to the producer of the item, as their only bearing on cost and profit are based around supply and demand. -- And that the end user can make up his loss based on the expressed value of the item.

Resources are finite at any given moment, but infinite over a timeline.

And yeah... central banking is a global ponzi scheme... but that's not to say that we currently have any better scheme. Various gold standards have been outdated or manipulated leading to their disuse... Credit based economies have benefits based around allowing economies to be more flexible when conditions change... but in the end, we can't stay on this system indef.

 

So we're just defining the end user of all consumer goods as a looser, right?

 

What? are we even still having the same conversation?

The end user takes a Loss economically in relation to the value of the goods based on the raw materials, production costs, transportation costs. Yes... because somebody is going to make a profit by the markup on these goods and services. That is a fixed point in time. How that end user takes advantage of the goods gives it an expressed value that can make up for or exceed the loss they initially incurred.

Example, You buy a car. The price of the vehicle is more than than the cost of the materials used in production, the cost of manufacturing it, and the cost of transporting it. Does that mean you're being taken advantage of? Not really. Why? Because you will use the vehicle to accomplish more in your day than you would without it. The extra time you save has a value to you, specifically, that it doesn't have to the auto manufacturer. They will adjust their prices based on how much profit they can make based on the base value of the item they have produced, not the value of what their goods will be to the consumer (which is hugely variable on the consumer themselves). At the point of sale, your pocketbook takes a dive that puts you in the red as far as the trade goes (that's the intrinsic value). But as you make use of that car, it recoups the initial loss (that's the Expressed value).

 

Yes, it's the same conversation. What I'm getting at is that the theory of value you're using, which is really just the labor theory, is arbitrary. All along the supply chain there is subjective valuation. Everyone involved, from the ore miner to the sales clerk, traded his time for what he thought was an appropriate amount of money. The end user, let's say me, traded what he thought was an appropriate amount of money for the car, which he obviously valued more since he made the trade. Now we could go back to each trade and decide whether or not the correct amount of money was exchanged. But in the same sense that that would be unhelpful, meaningless, arbitrary to do that it's arbitrary to say that I took a loss when I bought the car. For all you know I just wanted to enjoy the experience of driving it into the river so that I can know for sure that nobody else will ever see it again. The only thing you can really know, as an economist, is that I valued the car more than the money. You know that because I made the trade. This really isn't that important. I really just came to this thread to get Reiver to explain why he thinks infant industry arguments fly. But he doesn't want to do that. I guess he just wants me to take it up with Raymond or Hamilton, or whomever. So, I just figured that, while I'm here, I'd let you know that intrinsic value is illusory.

 

Try to be accurate. I want you to offer an argument. Perhaps then I can see if you understand the basics (such as the dynamic nature of comparative advantage). So far you've hid

 

I'm not even gonna look at it until I have something to verify or perhaps falsify. Right now all I have is a statement.

"as trade liberalisation increased, poverty also increased"

Then when I asked you to verify that trade liberalization caused poverty you alluded to an unnamed analysis commissioned by an institution that has endorsed or commissioned I don't know how many studies. I mean, is there a paper you can give me a link to? The name of it? I've pressed you several times now to get more specific. But you're acting like you don't want to have the discussion.

 

So you have no argument? Stop wasting my time

 

I don't cause you to respond. You need to source your claims. Like this one:

"We see such effects with trade where some sub-saharan countries have actually been made worse off through resource exploitation"

Because right now my argument against that is that you made it up. How do we know that my statement is not true, and yours false?

 

That comment comes straight from the World Bank. Given you don't have an argument, I'm not surprised you're ignorant of the evidence

 

Well, you're right I don't have an argument. But I don't have anything to argue against either. Remember? This thread has no sources. Just a bunch of naked assertions.

 

Indeed. Get back to me when you do

 

You're kinda making my point. Even if the only value to you was the satisfaction of driving the car into a lake so it'll never be seen again, that's the expressed value of the car for you. Sentimental value is still value to the right person.

And the same model can be applied to each individual step of the economic process. That ore miner traded the materials for money that was based on the value of the product, the miner had no expressed value for the ore... what is he going to do with it? so it's value there is explicitly what it's worth to a buyer for him. same with the car manufacturer, assuming they aren't currently in need of a new one, they sell it to somebody who has a need for one. There is no Expressed value to the car maker, because keeping it does not do anything for them. Works all the way along the chain.

This, however, doesn't take into account speculation... which is basically attempts at making a profit based on the difference of Intrinsic value and Expressed value.

 

A significant factor in what make an economy work is the difference in value between the buyer and seller. A life vest has a lot of value to someone that fell of a boat, and has negative value to someone running a marathon, with a range of valuations in between.

 

I think your friend is typically completely incorrect, yes there are examples of exchange being exploitative but those arguments don't apply one-to-one. That'd mean that the world had some net total of wealth and that this source was pulled from each time a person did well. We know that can't be true, one look at the increase in wealth simultaneously around the globe and it's very clear that this isn't a zero sum game, there aren't always winners and losers and it's just as... if not more likely that there will be winners and winners.

Still is by and large, we've just made the process more simply by introducing medians of exchange, bargaining used to be expensive, writing contracts was difficult and enforcement could be an issue, with those barriers reduced we're able to trade at higher volumes

But those resources (not all of which are finite) can be recombined or used in alternatives ways. Once upon a time oil was a disgusting hindrance to farmers, now it's one of the worlds most precious commodities, to suggest that we now know all the various ways we can possibly use our resources would not at all be consistent with human history.

It's still about exchange, if it were the case the a Dutchman or an Englishman getting richer necessarily meant someone in the third world got poorer, it'd be impossible for China to be doing as well as it is (or was?) while countries like Ghana and Kenya are also making steps to move out of poverty.

 

You are so close to being awake here.

We used to produce things. This actually produces wealth.

We now transfer risk to make money.

A man named Dylan Ratigan writes about this in his trade a cup, make a cup analogy.

I think you only need to look at the labor movements and people's increased stake in profits to find why we stopped making things, and started transferring risk!

People are still making things, just in countries with no labor protections, how anyone can see this as mere coincidence is amazing to me!

 

Your view is not consistent with economic reality. Of course we will expect shifts in trade patterns according to comparative advantage (with labour abundant countries producing more labour intensive product). Of course we will expect deindustrialisation in a mature economy (reflecting the twin consequences of productivity and income growth). However, manufacturing continues to be a major contributor to a whole heap of developed nations. See, for example, the high-wage Germans and the high exports of good and services as % of GDP

 

Speaking of which, you want to explain to me how German union wages are competitive?

It wouldn't be because they use tariff's to protect certain industries right?

A lot of Honda's driving around Germany right?

I love how you try to have your cake and eat it too. Our jobs go over seas because our wages aren't competitive. Meanwhile the average German worker makes more then the average American worker, and they aren't seeing the outsourcing we are. I'm sure you will deny Germany uses tariff's to protect certain industries that support their middle class and consumption, so I want to give this opportunity to explain why they aren't seeing the outsourcing we are, and yet pay their workers more?

 

You know what I don't expect?

Labor rights needed to develop a middle class ever being developed in a authoritarian state!

 

And this is why I advocate bringing the Tariff back hard. Before the Industrial revolution, the majority of our income was from Tariffs, When the revolution hit, we began to produce everything for everybody.. And Income tax made Tariffs rather obsolete as a gov source of revenue. These days, we hardly produce anything, so the Industries we have locally should be protected by boosting Tariffs.

Somebody already mentioned that fact that production generates new wealth. Living in a service based economy, all we do is shuffle wealth around while manufacturing heavy countries produce the new wealth... then we wonder why our economy is losing ground to them. And suffice to say, low skill manufacturing jobs are never coming back to the US. We need to boost Tariffs, and focus on boosting high skill manufacturing

 

who ultimately pays the tariff?

 

Who ultimately pays for the downward pressure on wages that a lack of tariff's enables?

At least my way isn't a race to the bottom!