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Comment by harimau777 | Hacker News Reader

It seems like what's missing is that being in "everyone's" best interest isn't the same as being in "every individual's" best interest. I don't know enough to say about this situation specifically, but something that helps society as a whole could still hurt a large segment of society.

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I think it's actually the other way around. Ricardo's models show that individuals stand to gain from trading with individuals who have different opportunity costs, and at least in simplified scenarios it seems to check out. It's when you look at the bigger picture that things get tricky. Does country A want to rely on country B for oil/food/weapons/whatever-else-they-need-to-survive? That could cause issues. Are imports causing competition with a fledgling segment of your economy that you want to become competitive on the global stage, but which isn't yet? Maybe importing massive amounts of cheap electronics today will prevent you from becoming a major exporter of electronics in the future, because local investment of time and money will be directed elsewhere; maybe this is fine, and maybe it isn't, depending on your goals. There are reasons to block trade that don't have to do with immediate efficiency. Absent of these reasons, Ricardo (sadly) seems to be mostly correct.

Edit: "the other way around" isn't quite right, I thought you were making a point besides the one you were actually making. Hurpadurpa.

If you want to ever have a chance to progress and develop your economy then these criticisms are everything. On the other hand if you have a developed economy and already lead in many sectors then you can follow these sorts of rules and still be fine. The point of this as ideology is simply to try to cement the "natural" order of things. It's failed mostly because of work of heterodox economists from the countries effected negatively by such ideology like South Korea.

I think that greatly understates the problem. Even under the assumptions used to derive comparative advantage, the theory says nothing how the benefits of the trade are distributed. Not in "every individual's best interest" could well mean an entire country is worse off, and the other better off.

Even more crucially, it says nothing on what its effects with time are. It's optimizing for immediate benefits, with no regard for future ones. Export rice and import tractors, because it's cheaper at this moment, but it never lets you develop your own industries.

What's an example of how an entire country gets worse off with free trade according to the model of comparative advantage? That model is shown in https://en.wikipedia.org/wiki/Comparative_advantage#Ricardo'... and I don't see how you get that result, unless you're thinking of someone powerful in that country just appropriating all the gains, which act it seems perverse to blame on trade.

Nothing a society does is in every individual's best interest.

The question tends to end up - are the costs and benefits diffuse or focused. Focused costs tend to be negatives (loud complaints from small groups), and diffuse benefits aren't perceived.

Free trade (at the start) is a diffuse benefit, and a focused injury. It's like arguing for action on climate change.

There is definitely a (relatively) small number people in the US who were harmed by globalization. The problem here is A) they have disproportionate political power and B) we lack a social safety net so they got hit harder than the should have.

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