On Mon, 13 Oct 2003 17:15:47 GMT, "Ed Huntress" wrote:
"Gary Coffman" wrote in message
.. .
Actually, Ed has proposed zero sum trade, and that is a form
of protectionism.

Where did you get that idea, Gary?

Because the only way you can achieve zero sum trade in
the short term is if the government artificially interferes with
commerce and restricts imports so that they exactly match
exports in dollar value. That is protectionism.

The net effect is that higher price domestic producers have
less competition in the domestic market, and can gouge
domestic consumers to their heart's content. That's always
the result of protectionism.

OTOH, free trade allows the consumer to seek out the best
value, wherever it may be, and maximize the value received
for dollars spent. That rewards efficient producers and
penalizes inefficient ones.

In the long term, this also results in balanced trade, because
in a free trade situation goods and value seek their own levels.
But it does so naturally via the net movement of value from the
less efficient nations to the more efficient ones.

Economics is the study of allocation of resources. Trading
systems are judged good if they maximize value, bad to the
degree that they impede maximization of value. Thus
protectionism is bad, free trade is good, because it allocates
resources in the most efficient manner.

Of course there is another thing, called political economy,
which tries to devise systems which allocate resources for
political purposes, ie narrow national advantage, rather than
for economic efficiency. This is warfare by another name.
Protectionism (and dumping) are its chief weapons.

When you start talking about protectionist policies, you're
talking about warfare systems instead of purely economic
systems. Such warfare is also called economic imperialism.
That's a generally discredited policy, known to lead eventually
to warfare of the actual shooting kind.

Gary