Free trade and the high price of Decadence

[idlisambar]

Interesting article from a site I recommend -- http://www.economyincrisis.com. It highlights one of the many problems with the prevailing logic of free trade. Though the practical irrelevance of comparative advantage arguments can be demonstrated in countless ways, this simple thought experiment is good for demonstrating that economic efficiency (narrowly defined) is a poor basis for trade policy.

The myth reigns that, whatever may be said about the political case against free trade or its collateral damage, serious economics answered the economic case in its favor long ago. The interesting thing, from the point of view of post-autistic economics, is that if one knows where to look, this is not only not true, it is not true even within the neoclassical framework.
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Begin a thought experiment with two wholly protectionist nations living side-by-side. Trade is forbidden. Make one a “decadent” nation that values short-term consumption over long-term. Make the other, a “miser” nation, the opposite.


http://www.economyincrisis.com/modules/news/article.php?storyid=51