The author mocks comparative advantage as an argument for free trade, suggesting it doesn’t work. They specifically point out it was supposed to let the other countries do the low-skilled work while America focused on high-skilled stuff and imply it didn’t happen… though it didn’t happen… didn’t it? America stopped creating lumps of steel and coffee tables and instead became a hub for cutting-edge software, media, and financial services… am I missing something or did comparative advantage not work exactly as it was supposed to? There were problems with this transition (when is there ever a transition in which there isn’t), but the country is wealthier and leads the world in several areas of the global economy.
The wider article focuses on trade deficits and almost assumes they are inherently bad. Though, honestly, are they? Essentially, America gets away with giving smaller amounts of its output to other countries than these countries give America. If someone gives me $2 worth of goods for every $1 worth of goods I give them, I’m not complaining. Why should America?
It’s also not like this is a new thing. America has run a trade deficit every single year since 1975 (and plenty of years prior to 1975 were deficit years). Now isn’t even the highest it’s been; the highest was in 2005. Taking the last 20 years as a timetable, the deficit is pretty normal right now.
Also, do people actually look up what the deficit is? Because it’s 3.77% of GDP. The way people talk about it, you’d think it was in the 10s of percentage points, but it’s not… it’s honestly pretty minor.
The wider article focuses on trade deficits and almost assumes they are inherently bad. Though, honestly, are they? Essentially, America gets away with giving smaller amounts of its output to other countries than these countries give America. If someone gives me $2 worth of goods for every $1 worth of goods I give them, I’m not complaining. Why should America?
It’s also not like this is a new thing. America has run a trade deficit every single year since 1975 (and plenty of years prior to 1975 were deficit years). Now isn’t even the highest it’s been; the highest was in 2005. Taking the last 20 years as a timetable, the deficit is pretty normal right now.
Also, do people actually look up what the deficit is? Because it’s 3.77% of GDP. The way people talk about it, you’d think it was in the 10s of percentage points, but it’s not… it’s honestly pretty minor.