Posts tagged with branched manifolds

If you buy a loaf of bread from the supermarket both you and the supermarket (its shareholders, its employees, its bread suppliers) are made to some degree better off. How do I know? Because the supermarket offered the bread voluntarily and you accepted the offer voluntarily. Both of you must have been made better off, a little or a lot—or else you two wouldn’t have done the deal.

Economists have long been in love with this simple argument. They have since the eighteenth century taken the argument a crucial and dramatic step further: that is, they have deduced something from it, namely, Free trade is neat.

If each deal between you & the supermarket, and the supermarket & Smith, and Smith & Jones, and so forth is betterment-producing (a little or a lot: we’re not talking quantities here), then (note the “then”: we’re talking deduction here) free trade between the entire body of French people and the entire body of English people is betterment-producing. Therefore (note the “therefore”) free trade between any two groups is neat.

The economist notes that if all trades are voluntary they all have some gain. So free trade in all its forms is neat. For example, a law restricting who can get into the pharmacy business is a bad idea, not neat at all, because free trade is good, so non-free trade is bad. Protection of French workers is bad, because free trade is good. And so forth, to literally thousands of policy conclusions.

Deirdre McCloskey, Secret Sins of Economics

A wonderful essay. I’ll just add what I think are some common answers to common objections: