The Expediency of Exchange, Its Evolution, Efforts Behind Facilitating and Extending It, and The Wall of Popular Restrictions That It Is Up Against, Then and Now
The evolution of exchange, of voluntary trade, has advanced so far beyond the depths of what we can imagine and we take it for granted all too often. When you see clearly how an increased population allows for a larger and more dynamic workforce, and that advances in science and technological innovations in capital investments that can perform more complex services and utilities emerge in the market, the range of your ability to exchange is immeasurable, providing that exchange is voluntary. As Bastiat so concisely put it, “the capital savings due to exchange surpass one’s imagination.”
Ultimately, the effects of an extended division of labor with in sourced labor or outsourced production are essentially the same as capital investment/machinery used in production in that they all free up labor to be available for newer wants, talents to fulfill desires of goods and services of a higher order. This was first discussed in chapter two of the Harmonies but the quotes most noteworthy in chapter four, summing up it’s main principles and thesis are:
“In the state of isolation, our wants exceed our productive capacities. In society, our productive capacities exceed our wants.”
“There are two great incontrovertible truths. The first is: The better man exploits the forces of Nature, the better he provides himself with all that he needs. …
…The second truth is: The resources of Nature are unequally distributed over the earth.”
What is so plain and clear at the individual level is often so heavily disputed at the larger and national level. When we think of how hardly no individual household attempts to produce all that they consume and that this would be too impoverishing to try, the plain as day in every way of life’s details show us the basics of economic principles that make textbook econ look like featherbedding to protect salaries of the tenured at our universities today!
When Marco Rubio campaigned for president last year, he advocated a continuation of import quotas on sugar so that a relatively few number of U.S. farmers would be protected from international competition. This is the typical status quo of most politicians but why not better exploit the forces of nature to render the benefits more accessible to all. We don’t produce “ice at the equator and sugar at the poles” (p.70) so to speak, and although that would be an extreme case of economic isolationist production or definitely not exploiting the forces of nature with sensible applications of our faculties where they are more conducive to richer results, what Rubio and others are proposing with these import quotas do restrict our ability to consume, on better terms, produce that grows more abundantly in climates more favorable to their gratuitous flourishing.
It’s a very lopsided argument without any logical consistency. Continue reading “Economic Harmonies: Chapter Four Review – The Expediency of Exchange”