StephenLawrence - 08 January 2012 12:11 PM

But the idea of increasing GDP through trade with other nations or just trade within your nation has nothing to do with advantages.

It has everything to do with the efficiencies created through comparative advantage. People don’t send stuff halfway around the world on container ships just for the fun of it. (For one thing, an executive who consistently lost money doing that would be fired).

Mostly the supposed advantage is merely that workers in a particular area will work for less, or some currency advantage.

This isn’t any real advantage, it just gets us all doing much more work than we need to to do the same thing.

dougsmith - 08 January 2012 12:20 PM

StephenLawrence - 08 January 2012 12:11 PM

But the idea of increasing GDP through trade with other nations or just trade within your nation has nothing to do with advantages.

It has everything to do with the efficiencies created through comparative advantage. People don’t send stuff halfway around the world on container ships just for the fun of it. (For one thing, an executive who consistently lost money doing that would be fired).

It’s to do with different wage costs and currency advantages, there is no real advantage there.

And take the use of the internet in the UK. Now rather than buying from a local shop, people buy from all over the country and the goods criss cross all over the shop, no advantage, just lots of extra work and conjestion.

We behave like drunken ants.

Denying it prolongs the problem.

Stephen

Wage costs are real costs, and advantages based on lower wages are real advantages. I honestly don’t know what you’re talking about.

dougsmith - 08 January 2012 12:20 PM

StephenLawrence - 08 January 2012 12:11 PM

But the idea of increasing GDP through trade with other nations or just trade within your nation has nothing to do with advantages.

It has everything to do with the efficiencies created through comparative advantage. People don’t send stuff halfway around the world on container ships just for the fun of it. (For one thing, an executive who consistently lost money doing that would be fired).

Well, I’ve succumbed to the temptation of posting yet again.

Because someone in one country will work for less than someone in another, and even with the shipping costs etc, it’s better for them to do it, from the point of view of the buyer, than for someone down the road to do it. Doesn’t mean it’s not much much less efficient to do it that way.

It’s much less efficient because it takes much more work.

Doh.

Stephen

dougsmith - 08 January 2012 12:33 PM

Wage costs are real costs, and advantages based on lower wages are real advantages. I honestly don’t know what you’re talking about.

That’s completely mad.

If we are all doing more to achieve the same thing that’s a disadvantage not an advantage.

Unless you are an economist that is.

Stephen

I suppose the way to look at it is what would be best to do if everybody worked for the same amount of money.

Stephen

For the love of God   Don’t define extra work as efficiency, or else you’ll condemn us all to extra work .

Lordy, lordy. 

Stephen

StephenLawrence - 08 January 2012 12:40 PM

I suppose the way to look at it is what would be best to do if everybody worked for the same amount of money.

So I should charge the same to make an iPad as Foxconn does? People living in Greenland should charge the same for a bushel of corn as people in Iowa? Again, I have no idea what you’re talking about.

Some people are better trained, more skillful, better located or willing to work for less for doing a given job. Specialization has been going on for thousands of years. It’s nothing new, and arguably it’s wholly responsible for the incredible increase in living standards over the past centuries.

kkwan - 03 October 2011 10:03 PM

Also, this article at the Guardian HERE

European stock markets fell sharply after France and Germany joined Spain and Italy on the sick list of manufacturing nations, undermined by weak demand and a lack of business and consumer confidence. Measures of manufacturing activity in China and the far east also showed a weakness that unnerved investors, sending the FTSE 100 back below the 5,000 mark at one stage and leaving all the major European stock markets in the red.

I don’t see how the stock market can react positively to all that.

Which is precisely why it does.

Stephen

kkwan - 19 November 2011 06:00 AM

StephenLawrence - 18 November 2011 11:38 PM

What you want to see is better economic prospects, but when you see that it will already be too late, the market will be 30% higher.

As it is now, there is no solid evidence of better economic prospects. The stock market tends to react preemptively because bullish investors do not want to miss the opportunity to buy in.

 

Now the market is 30% + higher as expected and we are seeing solid evidence of better economic prospects, in America at least, in the form of various better economic numbers recently.

This is the time to get bearish.

Stephen

This is the time to get bearish.

Keep an eye on Congress who offers the extremes of either left wing stupidity or right wing stupidity. (The rational elements of either side will never be heard from.)

dougsmith - 08 January 2012 12:20 PM

StephenLawrence - 08 January 2012 12:11 PM

But the idea of increasing GDP through trade with other nations or just trade within your nation has nothing to do with advantages.

It has everything to do with the efficiencies created through comparative advantage. People don’t send stuff halfway around the world on container ships just for the fun of it. (For one thing, an executive who consistently lost money doing that would be fired).

Unless he is a financial exec at a brokerage firm, then he gets a bonus.