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Author Topic: The Misunderstandings of 'Free Trade'  (Read 112 times)
BobK71
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March 07, 2018, 02:30:58 PM
Merited by Hydrogen (1), mrtryonebiggums (1)
 #1


John Maynard Keynes (NOT my favorite commentator) said:

"The ideas of economists and political philosophers, both when they are right and when they are wrong are more powerful than is commonly understood. Indeed, the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually slaves of some defunct economist."

The sudden return from memory of this was, of course, inspired by Donald Trump and Peter Navarro, his new best economist friend who advocates protectionist tariffs.  (I'm sorry if my brand of humor doesn't impress.)

Now let me be clear that I never fell for the America-first, stop-foreigners-taking-our-jobs rhetoric.  'What rules are best for humanity' has always been my main concern.  The justification for free trade rests on something called 'comparative advantage,' which argues that resources are best allocated when the free market decides who produces what.

But I smell a panic in the establishment air every time something threatens our globalized system.  Traders, bankers, economists and politicians seem to jump to the rescue of free trade, based on an idea that seems only a nice-to-have promoter of efficiency. Something is not quite right.

It's only with a lot of reflection that I came to understand reality as it truly is.  The entire theory of 'comparative advantage' rests on the assumption that money and finance are a free market too.  They decidedly are not.  If money is manipulated by the global establishment, all pricing signals are distorted, and 'free trade' is not nearly what it's advertised to be.

Central banks of developing countries have been doing the dirty work of the Western establishment by artificially cheapening their own currencies and exporting real goods to the West in exchange for 'trusted' money and debt issued by Western countries.  This suppressed the cost of goods in Western currencies and propped up the power of Western elites to issue money and debt.  When your dollars can buy Vietnamese goods cheaply, you have faith in them.

One of the side effects of this was the hollowing out of the Western manufacturing middle class.  And a side effect of that was the election of Trump.  Trump has always argued that 'bad trade' was the result of unfair practices by other countries.  The reality is that the Western establishment has allowed the odious system to continue for decades, and barely paid lip service against the illiberal practice of manipulating exchange rates.  And its members have benefited so far by having the world trust the money and debt they issue out of thin air.

The establishment's panic comes from the fact that the cancer has spread.  Any disruption to this globalized system, at this point of the world's addiction to it, means consumer price inflation, painful deflation from asset bubble bursts, or both (stagflation.)

The establishment narrative will always be looking for specific people to blame (as, for example, the book 'Lords of Finance' blamed the entire Great Depression on a few central bankers) rather than allow us to examine what is, in truth, a system of money that is rooted in theft and deception.

The only true solution to most of the world's problems is a free market in finance as well as goods and services.
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odolvlobo
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March 07, 2018, 03:15:52 PM
 #2

The concept of comparative advantage is straightforward: if countries produce what they are best at producing, then every country will be better off. As you wrote, we can only take advantage of the benefits of comparative advantage with free trade.

However, you argue that restricting free trade further and eschewing the benefits of comparative advantage would be an improvement because we don't really have truly free trade anyway. That logic seems broken to me. Wouldn't it be better to move in the direction of free trade instead?

People "jump to the rescue of free trade" because it is what "rules best for humanity". Restricting free trade benefits only a few people at the expense of everyone else. In the Trump case, tariffs on steel will help U.S. steel companies at the expense of everyone else in the U.S.

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March 07, 2018, 05:17:49 PM
 #3

Like the idea that emerged, which invited the reaction of many parties with different points of view. The idea of ​​free trade is also inseparable from this fact. There are many people who agree, and not a few opinions that reject it. In this context, the impact will be worse if it causes economic and political instability in a country, due to protests that the country avoids global trade competition. But if you think more deeply, that view is just an assumption for no good reason, or in a logical perspective.
The majority of these misconceptions stem from double bitcoin roles, namely commodities and currencies.
stompix
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March 07, 2018, 05:59:23 PM
 #4

Central banks of developing countries have been doing the dirty work of the Western establishment by artificially cheapening their own currencies and exporting real goods to the West in exchange for 'trusted' money and debt issued by Western countries.  This suppressed the cost of goods in Western currencies and propped up the power of Western elites to issue money and debt.  When your dollars can buy Vietnamese goods cheaply, you have faith in them.

You would be amazed to hear the radical politicians in my country.

According to them the entire eastern block has been accepted into the EU in order to impose EU standards, to destroy our economy and to make us a consumer market for the goods that Western Europe is unable to sell to its own citizens.
And that the depreciation of our currency is also a plot to buy our lands for cheap.

Isn't it funny how you can have two totally opposite views on something with the same arguments?

However, you argue that restricting free trade further and eschewing the benefits of comparative advantage would be an improvement because we don't really have truly free trade anyway. That logic seems broken to me. Wouldn't it be better to move in the direction of free trade instead?

I would, (it is impossible unfortunately) send every guy that thinks free trade is stupid to spend years like me behind the iron curtain, then come back here and explain to the world how restricting free trade is a marvelous idea.
Like having the same damn car model for 30 years because with no outside competition nobody gives a damn on improving anything.


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March 07, 2018, 06:49:04 PM
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Central banks of developing countries have been doing the dirty work of the Western establishment by artificially cheapening their own currencies and exporting real goods to the West in exchange for 'trusted' money and debt issued by Western countries.  This suppressed the cost of goods in Western currencies and propped up the power of Western elites to issue money and debt.  When your dollars can buy Vietnamese goods cheaply, you have faith in them.

You would be amazed to hear the radical politicians in my country.

According to them the entire eastern block has been accepted into the EU in order to impose EU standards, to destroy our economy and to make us a consumer market for the goods that Western Europe is unable to sell to its own citizens.
And that the depreciation of our currency is also a plot to buy our lands for cheap.

Isn't it funny how you can have two totally opposite views on something with the same arguments?

However, you argue that restricting free trade further and eschewing the benefits of comparative advantage would be an improvement because we don't really have truly free trade anyway. That logic seems broken to me. Wouldn't it be better to move in the direction of free trade instead?

I would, (it is impossible unfortunately) send every guy that thinks free trade is stupid to spend years like me behind the iron curtain, then come back here and explain to the world how restricting free trade is a marvelous idea.
Like having the same damn car model for 30 years because with no outside competition nobody gives a damn on improving anything.


Perspective is integral in any argument because what is from your side  may not be from theirs as it is evident here. That is some conspiracy theory even for some radical politicians to think their own continent is poisoning one side of it man oh man. I however, fully agree with that other point about free trade because take a look at Cuba. Right now they still have old cars from the 50s and 60s, as well as all the older buildings. Only now will they be able to build stuff up again due to free trade, before it was extremely restrictive.

BobK71
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March 07, 2018, 06:53:26 PM
 #6

However, you argue that restricting free trade further and eschewing the benefits of comparative advantage would be an improvement

I am only stating the mess we're in, not making any suggestions about whether to keep 'free trade.'  (Take another look at the OP.)  What I want to do is to improve people's understanding of the real situation, and to reduce their reliance on information fed by the conventional media, etc.

because we don't really have truly free trade anyway. That logic seems broken to me. Wouldn't it be better to move in the direction of free trade instead?

The only way to 'move in the direction of free trade' is to have a free monetary and financial market.  But, don't hold your breath, since the political and financial elites are not about to give up their power, until enough people become aware.  Probably not in our lifetime.

People "jump to the rescue of free trade" because it is what "rules best for humanity". Restricting free trade benefits only a few people at the expense of everyone else. In the Trump case, tariffs on steel will help U.S. steel companies at the expense of everyone else in the U.S.

I'm not arguing for Trump's policy.  But we have to understand that his proposals (and indeed he himself) are a long-term side effect of the global financial manipulations by the elites.  If we keep the status quo, the same global imbalances will just continue, and will blow up in our face in a form perhaps even worse than Trump policies.  The only difference is that today's elites will continue their good life for a while longer, if we keep things the same.  (And that's why they're so scared of Trump.)

As I wrote, the cancer has spread, and at this point we're looking at pain no matter what we do.  The only good thing I can say is that, with higher public awareness, hopefully, in the long term, we can reduce the ability of the elites to manipulate money and cause these painful imbalances in the future.
BobK71
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March 07, 2018, 07:04:20 PM
 #7

Isn't it funny how you can have two totally opposite views on something with the same arguments?

Sorry, I'm not sure I understand how we're having opposite views on something with the same arguments.

Politicians will do what politicians do.  If you can misinform people enough so they'll vote for you, misinform them.  Trump and eastern bloc radicals are probably not different in this way.
BobK71
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March 07, 2018, 07:21:42 PM
 #8

I would, (it is impossible unfortunately) send every guy that thinks free trade is stupid to spend years like me behind the iron curtain, then come back here and explain to the world how restricting free trade is a marvelous idea.
Like having the same damn car model for 30 years because with no outside competition nobody gives a damn on improving anything.

Perspective is integral in any argument because what is from your side  may not be from theirs as it is evident here. That is some conspiracy theory even for some radical politicians to think their own continent is poisoning one side of it man oh man. I however, fully agree with that other point about free trade because take a look at Cuba. Right now they still have old cars from the 50s and 60s, as well as all the older buildings. Only now will they be able to build stuff up again due to free trade, before it was extremely restrictive.

The bad products you mention are mainly the result of socialist economies, and less importantly of trade restrictions.  (It would be strange to talk about free trade when you have a totally controlled domestic economy.  What was most badly needed was domestic competition.  Although I would imagine free trade would have allowed Communist elites with access to dollars a few more Western luxuries.)

Instead of the economic socialism you have in the old East Germany or Cuba, what we have in the West is financial socialism.  We pretend to be a free market (and most people actually believe it!) but the market can't possibly be free when money and debt are manipulated by the state (in alliance with the top banks.)

'Free trade' is only a tool with which to delay the inflation that makes obvious the problems of financial socialism.  As with any deception, there are side effects.  In this case, large segments of Western population with no economic prospects, translating into their votes for Brexit, Trump, and anti-establishment parties in France, Germany, Austria, Italy, etc.

If we want truly free trade, we have to have free money first.
stompix
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March 07, 2018, 08:40:50 PM
 #9

Isn't it funny how you can have two totally opposite views on something with the same arguments?

Sorry, I'm not sure I understand how we're having opposite views on something with the same arguments.

Politicians will do what politicians do.  If you can misinform people enough so they'll vote for you, misinform them.  Trump and eastern bloc radicals are probably not different in this way.

I didn't mean as in You and I, but in politics.
Some view the "cheapening" of another currency as a tool for others to sell their product cheap in you country, the others view this as an attack by foreigners on their currency to make their country assets easy to grab and keep them poor.

For me spending time on both sides of the Polish German border it's hilarious to see that any economical move is interpreted in two ways,to the point that the whole population is getting tired of it.

There is a conflict for example that the Eastern Europeans are paid less and everybody was angry because of that.
Normal right?
When the EU decided that for example truck drives have to be paid the minimum wage in the country they are working, our populists politicians went up in flames claiming that this is a measure that will make east europeans less competitive and take away their jobs.
Normal....not so normal...wtf?

And the reason I'm giving you EU examples is because we're using the same currency in multiple countries (not the whole EU but enough).

We have nothing to manipulate here in order of currency no exchange rate, there is free trade with no taxes.

But even with this the conspiracies flourish.
And you would be amazed how many wish their country could play with the exchange rates.

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March 08, 2018, 04:47:03 AM
 #10

The establishment narrative will always be looking for specific people to blame (as, for example, the book 'Lords of Finance' blamed the entire Great Depression on a few central bankers) rather than allow us to examine what is, in truth, a system of money that is rooted in theft and deception.

As far as I know, the entire story about "Jesus chasing money lenders out of the temple" was based upon them(bankers) manipulating a currency trade they had a monopoly over to profit at the expense of the poor and middle class within some standardized and regulation approved loophole of wealth redistribution/inequality. I saw a documentary about this awhile ago which detailed specifics of how money lenders operated back then but sorry can't remember off the top of my head & would have to dig to find the info. Perhaps, circumstances back then were virtually identical to what we see today. If what you say about systems of money being rooted in theft and deception is true, it may be "nothing new under the sun".

Incidentally, there is a thread in this section devoted to Trump's proposed metals tariffs:

https://bitcointalk.org/index.php?topic=3054546.0

Would love to have your input and feedback on it. Even if your opinion is a dissenting one, those can be the best as those might teach us the most, yes?  Smiley

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March 08, 2018, 04:30:05 PM
 #11

Some view the "cheapening" of another currency as a tool for others to sell their product cheap in you country, the others view this as an attack by foreigners on their currency to make their country assets easy to grab and keep them poor.

For me spending time on both sides of the Polish German border it's hilarious to see that any economical move is interpreted in two ways,to the point that the whole population is getting tired of it.

These are 2 sides of the same coin.  Currency is the major means by which imperial systems take from everyone and give to the elites.  Germany is running its imperial system in Europe in the same way the US is running one across the world.

The way it works is that the elites in the poorer country are encouraged to buy up the richer country's currency, to keep their own currencies artificially cheap and boost their exports.  The only way to do this is a massive creation of money in the poorer country, and all the financial bubbles that follow, in that country.  Eventually, the bubbles burst and the poorer country is screwed no matter what (even though it has been shipping real goods in exchange for the richer country's paper and is considered the creditor!)

One of the possible outcomes for the poorer country at this point is a massive devaluation to stabilize its system.  In this scenario, the richer country will come in and buy up assets cheap.  The entire imperial system is based on exploitation of poorer countries by an (effective) alliance of elites in all countries, with the population in richer countries taking some share of the benefits.

The root cause of this is the lack of public awareness in money and finance, though in Europe there seems to be somewhat more awareness of these issues than the world at large.

And the reason I'm giving you EU examples is because we're using the same currency in multiple countries (not the whole EU but enough).

We have nothing to manipulate here in order of currency no exchange rate, there is free trade with no taxes.

But even with this the conspiracies flourish.
And you would be amazed how many wish their country could play with the exchange rates.

Imperial exploitation happens just as easily with single currencies as with different currencies.  (E.g. Greece by Germany within the eurozone.)  In the 19th century, the world used the same 'single currency' called gold.  Things were not fundamentally different, except Britain not US was at the head of the system.  (The precise mechanism will vary with different currency arrangements -- with 'single currency', the instrument tends to be debt rather than 'money'.)
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March 08, 2018, 05:01:10 PM
 #12


As far as I know, the entire story about "Jesus chasing money lenders out of the temple" was based upon them(bankers) manipulating a currency trade they had a monopoly over to profit at the expense of the poor and middle class within some standardized and regulation approved loophole of wealth redistribution/inequality. I saw a documentary about this awhile ago which detailed specifics of how money lenders operated back then but sorry can't remember off the top of my head & would have to dig to find the info. Perhaps, circumstances back then were virtually identical to what we see today. If what you say about systems of money being rooted in theft and deception is true, it may be "nothing new under the sun".

IIRC the priesthood stipulated that only temple money (not the 'unclean' Roman coins) was acceptable as offerings in the temple.  This not only created an artificial demand for money the temple issued out of thin air, but the whole business of changing money back and forth at the temple door was born.  As I understand, coin money was unlike paper money in that the quality of individual coins varied and mattered, and this likely created opportunities for 'financial innovations' on a trade-by-trade basis.  Again, another alliance of financial and legal powers-that-be to benefit mutually.

Incidentally, there is a thread in this section devoted to Trump's proposed metals tariffs:

https://bitcointalk.org/index.php?topic=3054546.0

Would love to have your input and feedback on it. Even if your opinion is a dissenting one, those can be the best as those might teach us the most, yes?  Smiley

Thanks, I'll see if I have something to say.
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March 12, 2018, 04:05:43 PM
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 #13

More fuel to the fire!

There Is No "Free Trade" - There Is Only The 'Darwinian Game Of Trade'
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March 14, 2018, 09:54:25 AM
 #14

Actual unemployment in the US is much higher than official data.

According to the findings of a study by experts at the Brookings Institution, the proportion of non-working American men aged 25-54 has tripled in the past 50 years.
https://www.brookings.edu/interactives/saving-men-in-the-heartland-the-case-for-place-based-employment-policies/?utm_medium=social&utm_source=facebook&utm_campaign=es

Trump is forced to impose duties on imported goods in order to create jobs.
BobK71
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March 14, 2018, 08:39:52 PM
 #15

Actual unemployment in the US is much higher than official data.

According to the findings of a study by experts at the Brookings Institution, the proportion of non-working American men aged 25-54 has tripled in the past 50 years.
https://www.brookings.edu/interactives/saving-men-in-the-heartland-the-case-for-place-based-employment-policies/?utm_medium=social&utm_source=facebook&utm_campaign=es

Trump is forced to impose duties on imported goods in order to create jobs.

By far, the most popularly quoted 'unemployment figure' is one where the media openly admits doesn't include people who have given up looking.

You have to wonder, if the figure is so useless, why keep using it?  It's like watching someone on TV, eating something and saying, 'this will kill me,' and keeping on eating.
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March 14, 2018, 09:39:19 PM
 #16

The point of trade is not that lower prices on some things are offset by losses of jobs and wages.Rather,the point of trade is that there is a general increase in wealth.Otherwise the trades would not be happening. So it simply cannot be true that there’s no net positive gain from trade.
BobK71
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March 15, 2018, 04:39:51 PM
 #17

The point of trade is not that lower prices on some things are offset by losses of jobs and wages.Rather,the point of trade is that there is a general increase in wealth.Otherwise the trades would not be happening. So it simply cannot be true that there’s no net positive gain from trade.

Unfortunately, this is only according to conventional economics, which assumes there is no manipulation by the elites of money and debt values.

But both logic and history show that 'free trade' as has happened over the last quarter century have distorted prices and production through exchange rate manipulation, and caused financial bubbles whose bursting did cause economic harm.
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