Why Trade Is Not a Zero-Sum Game
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Trade brings many benefits, says Douglas Irwin of Dartmouth College; it lowers prices and increases variety, among other things. Irwin, who is also author of “Free Trade Under Fire” (2014, Princeton University Press), was interviewed at “Trade Issues Today,” a conference at Columbia University in September 2016. The conference was sponsored by the Chazen Institute for Global Business, the School of International and Public Affairs, the Center for Global Governance, and the Deepak and Neera Raj Center on India Economic Policies, Columbia University.
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externalities
1.ECONOMICS
a consequence of an industrial or commercial activity which affects other parties without this being reflected in market prices.
If one were to add up the cost of climate change, pollution, deforestation, extinction of species, sea level rise, etc.
Would trade still not be a Zero-Sum Game? -
On the average most agree with these statements but the problem arises at the individual level - the factory worker in Ohio gets fired and now earns nothing but the West Coast investor's stock goes up in price because the product is now being produced in some emerging market with cheaper labour and imported back into the US. The average of the two shows that "Americans" did better by this arrangement (and this is what Dr Irwin says) but at the individual level the impacts are dramatic. Since NAFTA, the midwest has been hollowed out and yet our stock markets have never been stronger and the ultra wealthy stock owners have never had it so good. The fired worker can not afford the cheaper imported good but the stock owner can afford two or three....
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