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Comment by cjy | Hacker News Reader

You don't understand comparative advantage. As long as there is scarcity, comparative advantage matters. There were 24 hours in a day when Ricardo was around and there still are today.

There are theoretical cases under which trade can make a country worse off, but they are rare situations and cannot be simplified down to "inputs flow around today but didn't during Ricardo's days". That doesn't even make sense.

But what bugs me most about your post is your belief that we should work to keep wages high for overpaid middle class American by prohibiting poor Chinese and Indians from having access to world markets where they might actually earn their marginal product. People are all for drinking fair trade coffee and supporting AID's programs in Africa. But when it comes to having to compete on a level playing field with foreign workers all that altruism goes out the window.

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> But what bugs me most about your post is your belief that we should work to keep wages high for overpaid middle class American by prohibiting poor Chinese and Indians from having access to world markets where they might actually earn their marginal product.

Rather than ascribe sinister motives to a person (a desire to oppress Chinese/Indian workers in order to keep American salaries high), maybe you could consider the structural problems that make it difficult for American workers to compete with foreign ones. OSHA regulations, Social Security, Medicare, health insurance, unions, and many other factors go into the cost of an American worker. I don't know much about China or India but I doubt they have any of these things. So, are they important? If they are, why are we ok with importing goods made by people without the same protections, in order to save a few bucks? If they're not important, maybe we should eliminate them, so we can compete in the global marketplace.

Sinister motives are not necessary to produce a negative outcome and making a decision to save these worker protections for Americans also amounts to making a decision to deprive workers from poorer nations of access to markets that will allow their standard of living to rise.

There is no level playing field with foreign workers, because they and we are not free to travel where wages are best or prices are lowest. Capital is free in the modern economy, but labor is not. Exploiting the poverty of trapped foreign workers is not altruism, it's lowering costs to maximize profits, which is what businesses are supposed to do.

And trade deficits accumulate as public and private debt (or rather negative savings.) This is not theoretical, this is an identity.

The one part of his post that had some substance is that we're not participating in free trade on a level playing field because the Chinese won't freely float their currency and instead have it pegged.

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