On Fri, 2009-08-21 at 14:13 -0600, Alex Esplin wrote: > Even in a straight across trade, from my point of view I have to be > better off than the person I'm trading with, or there is no incentive > to trade. Granted, this example is entirely dependent on > point-of-view, but much of the economy is.
Whoa, whoa, whoa. This is very much not true and will lead to some pretty poor decision making if you attempt to apply your theory. I suspect that such fundamental misunderstanding of the advantage of trade is at the heart of many people's desire to enact stupid protectionist laws. The law of Comparative Advantage shows that when two people trade, both can benefit even if one is much more productive than the other. http://www.youtube.com/watch?v=aLe_LF622JI http://en.wikipedia.org/wiki/Comparative_advantage -- "XML is like violence: if it doesn't solve your problem, you aren't using enough of it." - Chris Maden /* PLUG: http://plug.org, #utah on irc.freenode.net Unsubscribe: http://plug.org/mailman/options/plug Don't fear the penguin. */
