These days there is a lot of talk about trade wars and many people are upset calling for actions to support "our" businesses and so on. Here are the most common misconceptions
- I only own businesses that I own. I do not own businesses via my nationality. Helping them is not helping me, businesses that cannot compete in the current environment need to get flushed out. Supporting a sick business does not make it healthy, it only prevents new healthy businesses from developing.
- I trade with people. It does not matter where on the earth they are, what matters is price, quality and the details of the provided service. Locally I select products this way and I do the same on the global market.
- Trade deficits are interesting from a statistics point of view, but don't matter especially for my choices. There is my personal trade deficit, the trade deficit of my family, the trade deficit of my city, region and finally country. We only ever hear about the first and the last. The first is obviously significant, but the last is as irrelevant as the ones before it. There is nothing special about grouping people by nationality.
What helps me the most is free trade. Being able to get products from the person on the earth that can produce them best according to my preferences. Not having some random limitations imposed on who I am allowed to trade with and under which conditions. Tariffs and trade wars always come to the detriment of the population on both sides.
Then why are politicians making such a fuss around trade? The reason is simple power politics. For me personally it does not matter, but when I own a country, then I want to preserve the power of that country. From this point of view, large trade deficits are a threat to your power. It means the population is spoiled and unable to support themselves at the standard of life they are used to. The foreigners shipping the goods dont do so that out of good faith, but because they gain influence in your country. They buy companies and resources undermining your power.
Reducing a trade deficit is thus an important priority from the point of view of a leader, and also of a supporter of that leader hoping to get a few crumbs of the wealth generated from that power by force. But it's irrelevant to a free person, one who produces something and is not afraid to sell that on an open global market and in retrospect benefits from the creativity and knowledge of the entire humanity.
thank you for information
that is good
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit