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Comment by deogeo | Hacker News Reader

> Also, how much of this effect is basically the rest of the world playing catch up in terms of economic production?

If the rest of the world becoming more productive results in US workers being worse off, then something is severely wrong with US trade policy. For one, it contradicts the dogma that more trade is strictly beneficial.

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>For one, it contradicts the dogma that more trade is strictly beneficial.

It is strictly beneficial, in aggregate. But in any situation, there are winners and there are losers. There are no decisions you can make where everybody wins. If you live in a first world country and your skill set is worse than somebody in the developing world, you’re going to have a bad time.

> But in any situation, there are winners and there are losers.

The usually trotted-out theory of comparative advantage claims there are only winners.

again, only in the aggregate/ entity of measurement level.

I would argue anyone who says otherwise is either being disingenuous or doesn't actually understand economics.

That is not to say that is not trotted out frequently.

Also, to be fair, during my economics education they had this whole focus on modeling policies and finding optimizations where no one is worse off.

Of course, in the real world, that practically never happens... and there is an argument that the focus on efficient/competitive markets/ equilibria/rational agents is also a bit "wouldn't it be nice if the world was actually like this...", whereas in the real world only the most trivial goods/markets can vaguely be described as such...

I don’t think you fully understand comparative advantage then.

>If you live in a first world country and your skill set is worse than somebody in the developing world, you’re going to have a bad time.

Even if your skill set is greater, your cost of living is higher. So you'd have to be more than marginally better.

Also, the logical conclusion of where this seems to be headed is that if you're a low-skill person living in a first-world county, voting for protectionist, isolationist policies/politicians is a rational choice.

Except protectionism makes everyone poorer in the medium term and actually causes international conflict. Who do you think gets drafted to fight war when trade wars turn to real wars?

Perhaps if society used the increased wealth to benefit everyone the value of global interconnected trade could be felt by everyone. This is an easy fix, return to the post World War Two tax policy that built the middle class. Return to a well respected government that drives large scale work like highways, scientific research, the space program. Think about how much technology is a direct result of military research (GPS, the Internet, rocketry, etc) imagine if we mobilized on the same scale for exploring space, basic research and innovation and entrepreneurial activity.

Sure, as we saw quite vividly in 2016. This is also known as Crab Mentality.

It's really not - crab mentality refers to pulling others down for no reason other than envy. But in this case, the reason is the lower classes don't want to be pushed even lower. Are they supposed to selflessly sacrifice themselves so that the rich can get even richer?

They want the economy to suffer to preserve their legacy careers doing pointless things like mining coal or forging steel, things that somebody in a developing nation can do just as well for 1/10 the cost. Why are blue collar jobs so sacrosanct? When the careers of secretaries and travel agents essentially vanished, there was no weeping and moaning, no irrational protectionism, no economic suicide. People moved on to do something more productive with their time, and so should the coal miners.

So, yes, they are crabs at the bottom of the pot seeing other crabs moving up, and they cannot abide by that.

Ah yes, mustn't let "the economy" suffer - who cares about the actual workers within that economy.

I mean, you’ve shown that you don’t even understand the concept of comparative advantage at the individual vs. aggregate level. How am I supposed to explain to you that protectionist policies benefit a small minority of workers at the expense of almost everybody else?

Instead, I’ll just suggest that you find a good Freshman-level Economics textbook and read carefully. You may find it illuminating to understand the concepts behind complex policy decisions.

> How am I supposed to explain to you that protectionist policies benefit a small minority of workers at the expense of almost everybody else?

Given that none of the most successful economies developed without protectionism [1,2], you'll have a difficult time explaining that indeed. That pesky reality, always getting in the way of "good Freshman-level Economics textbooks".

[1] https://en.wikipedia.org/wiki/Comparative_advantage#Criticis...

[2] https://news.ycombinator.com/item?id=20320483

I forget, are we talking about workers in first world countries or workers in developing countries? I’m not quite sure why you are gloating like you just made a strong counterargument, but it’s not a good look.

I think that dogma though was meant to address the situation in a global context. ie - More trade is strictly beneficial for the global population in aggregate.

But yeah, it's still trade, so there will be lows and highs, and ebbs and flows.

> For one, it contradicts the dogma that more trade is strictly beneficial.

Ricardo's original idea was applicable with a narrow set of assumptions/conditions and didn't have much to say about who'd end up with the greater net wealth. I'm not sure how/why it was turned into a magical improve-any-economy law of nature.

Ricardo's mistake is not thinking about development; comparative advantage is optimal now, but a society that just makes coffee beans is going to lose in the end to the one that makes microchips because of the difference in how the economy and society develop over time.

This may have been a mistake by Ricardo, but not one that points towards less trade as optimal. Indeed, export-led development (implying more trade openness) is the one reliable way we know about of going from the "coffee beans" to the "microchips" stage of development.

False, I recommend Ha-Joon Chang's writing on this subject. The US did not develop in a climate of trade openness, it used tariffs to protect its development. In fact no developed economy developed this way, all of them protected their industry until it was mature and ready to compete, had their governments invest in research and infrastructure and so on. If you have an example of a country that successfully developed through export led development and trade openness I would love to hear it.

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