Posted by Adam @ 6:02 pm on May 30th 2007

Free trade: it’s good for us

John Stossel, whose explanations of underlying economic facts generally kick all kinds of arse, whacks it out of the park with this article.

I suspect ignorance about economics leads many to believe that when two people exchange goods and money, one wins and the other loses. If rich capitalists profit, the poor and the weak suffer.

That’s a myth.

How many times have you paid $1 for a cup of coffee and after the clerk said, “thank you,” you responded, “thank you”? There’s a wealth of economics wisdom in the weird double thank-you moment. Why does it happen? Because you want the coffee more than the buck, and the store wants the buck more than the coffee. Both of you win.

Now, yes, you need competition and some stability for the underlying motivations to be satisfactory most of the time (for example, if I’m dying of thirst, I want a bottle of Dasani more than I want a hundred dollars, but that’s not a generally satisfactory situation; the problem is, of course, that I’m dying of thirst, which means a shortage of water and, therefore, high prices) but those are achievable. At the end, Stossel says that his next piece will be about gas prices; I have been thinking of offering my own opinions on that issue, particularly the recent price-gouging nonsense in the House, but I am looking forward in any case to seeing what Stossel has to say.

The whole article is quotable, but I’ll just end with this:

People who live in different countries are divided by a political boundary, but boundaries are accidents of history or the results of politicians’ arbitrary decisions. Political boundaries are economically irrelevant. When left free, people trade across them as naturally as they do across state lines. Trade is trade. Buyer and seller both benefit. “Thank you.” “Thank you.”

2 Comments »

  1. Stossel’s a pussy.

    Comment by weltschmerz — 5/31/2007 @ 10:39 am

  2. Just kidding. I love that guy.

    Comment by weltschmerz — 5/31/2007 @ 10:40 am

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