Sunday, December 9, 2007

Trade benefits both sides

Many people think that trade is zero-sum, meaning there is a loser and a winner and the net effect is zero. Their logic is that you pay money to get something and give something to get money, or otherwise; exports are good, imports are bad.

So allow me to make this very simple example:

There are 2 individuals here:
A man that demands sex and supplies attention.
A woman that demands attention and supplies sex.

If they trade with each other: Both sides get what they want. They become happy.
If they don't: Both sides don't get what they want. They become unhappy.

Observation tells us that on the above case, such trades happen (relationship and marriage) which means people must believe they will be happier after the trade or the trade will not take place.

The next time you buy foreign produce, think about it.
You get what you want, you're happier.
The foreign firm gets your cash, they're happier.

What did we learn today? Don't isolate ourselves! Trade!

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