International Trade
| Reading: “The Stranger“ |
| Activity: The International Trade Game – I have tweaked this for my own use. Contact me for more. |
Textbook Reading: Chapter 10 (Section 10.1; pp. 329-341)
The best way to understand economic interdependence is the classic pamphlet I, Pencil.
Here is a great article showing the economic interdependence required to produce the Pfizer vaccine:
a medicine with 280 different components, manufactured in 86 different sites across 19 countries, driven partly by the research of a son and daughter of Turkish migrants to Germany. That’s globalization in a needle
The Financial Times accompanied a report on disruptions to bicycle supply chains with this amazing interactive graphic:
This tweet went viral in 2021:
https://twitter.com/JamaicanJihadi/status/1438225210914770951
But this neglects how efficient container ships are:
Transporting a four-ounce pear cup from Buenos Aires to Bangkok to Los Angeles by container ship: 30g of CO2 emissions—plus 1g for every 56 miles the pear cup travels by truck.
Driving a typical U.S. car two city blocks in Manhattan (north-south): 35.6g of CO2 emissions. https://t.co/FYYNI3YzOI pic.twitter.com/2vNDtLGN5s
— Ryan Radia (@RyanRadia) September 17, 2021
In Dave Chappelle’s Equanimity he does a bit mocking Donald Trump’s approach to jobs. With 19:46 remaining, he points out that if we brought jobs from China to the US then an iPhone would cost $9000. “Leave that job in China where it belongs! None of us want to work that hard. I want to wear Nikes I don’t want to make them”. Chappelle’s point is that it’s better to have cheap imports than low productivity manual labour.
A literary example of the recognition of an extended social order in the creation of seemingly trivial household items is David Lodge’s ‘Nice Work’ (1988) – see here.
This guy attempted to make a sandwich from scratch. It cost $1500 and took 3 months. It’s remarkable how cheap and plentiful sandwiches are, due to an extended global supply chain and division of labour.
This video shows the history of globalisation through some important maps:
Here we use basic demand and supply analysis to look at the welfare effects of trade intervention:
Modern globalization was partly fueled by technological advances such as containerization:
| Learning Objectives: Estimate the welfare effects of trade intervention
Focus on diversity: Deepak Lal is one of the most famous advocates of open trade policies. He was also a known skeptic of development economics. He passed away in 2020. |