Posted on 01/23/2003 6:06:25 PM PST by one2many
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I did give you the session of congress it appeared in, 36-2, which means it occurred between December 1860 and the inauguration in 1861.
and as I told you once before, there's no need to root through the congressional record when we have primary sources to examine.
And exactly why aren't the secession era speeches of southern leaders primary sources themselves? I would also note that there is a need to cite them considering that the documents outlining causes for secession are few and for most of the states non-existant.
Your quote from the Georgia Secession statement says "In the first years of the Republic...". Not exactly relavant to 1860 is it?
Yeah. That's why they add at length things like "But when these reasons [from the first years of the Republic] ceased they were no less clamorous for Government protection" and "All these classes saw this and felt it and cast about for new allies" to let them reinstate those same policies.
The quote goes on to say that "the navigating interests begged for protection from Foreign Shipbuilders ...", not Southern shipbuilders! Whose fault is it that southerners didn't take advantage of the laws being passed to protect America from foreign competition?
Under that same line of reasoning, you and I are both at fault for complaining about welfare handouts since neither of us (well, me, and presumably not you) get on the federal dole to take advantage of them while they are there. But hey! What's to stop us from cutting off our own income to qualify and signing up for it just because it is there? Such is absurd since we both know that welfare as a public policy is a problem, just like protectionist tariffs back then were a problem.
The navigating, commercial, and manufacturing interests that the Georgia supremists whine about in their secession document, were all avenues that were available for them to pursue if they chose to.
Food stamps are available for you to pursue if you choose to. Does that mean you are going to sign up tommorrow?
Nothing was preventing the south diversifying its economy
So you think the southern government should have taken steps to alter its economy to industry when capitalism, left to its own forces, created one of agriculture and export? Sounds peculiarly soviet to me...
What you're really not willing to admit, is that the South was dependent on the North for most of its finshed products.
Not exactly. The North definately wanted it that way (having all the southern market = more money). But as long as a condition of free trade existed, finished goods from abroad could be imported. That in itself is one of the main reasons tariffs are always desired by home industries who have foreign competition - it lets them corner the market for themselves, all thanks to a little intervention from uncle sam.
You should also note that in 1860, the south accounted for some 75% of the entire nation's exports. Not only did the north rely on the south for its materials to make those manufactured goods, it relied on the south for the nation itself to have any substantial ammount of foreign trade. When trade itself stops due to barriers of entry like tariffs, exports become affected for obvious reasons. When a region's economy is export oriented, as was the south's in 1860, it is with good reason that they would oppose the erection of those barriers - if those barriers go up, their economic livlihood is killed off by a bad interventionist and redistributive government tax policy.
You would think that someone who claims to be a capitalist would be able to recognize the difference.
As a capitalist, I recognize that true capitalism cannot exist without free trade. I recognize that a low and restrained government tax policy is best for a capitalist market as its impeding effects are minimal and its inclination to use tax revenues economic for intervention is restrained. I also recognize that capitalism functions best in perfectly competitive markets and the best example of such a market in real life is in the agrarian industries. I further recognize that when industry is supported by government intervention in the form of protectionism, subsidies, and taxpayer-funded handouts, true capitalism does not exist. On every one of these counts, the south exhibited capitalism while the north turned to mercantilist interventionism.
No,,,it is not. That fits you more so than me. You need to stop huffing those diesel fumes. They tend to cloud the mind.
No one can call the death of 620,000 men trivial. All because Lincoln would not let the South go her way.
You should also note that in 1860, the south accounted for some 75% of the entire nation's exports.
Yes, but rather than being a strength that was a weakness. The south exported cotton to mills in europe and the north where the value added by manufacture equaled the price the raw cotton brought the south. The south then imported 2/3 of its clothing and other finished goods from the north or abroad.
In 1860 the city of Lowell Massachusetts had more spindles for the manufacture of cotton cloth than all of the soon to be confederate states.
No, I'm afraid you have it all backwords. The north with its free labor and economic diversity represented 19th century capitalism, not the bound labor supremist south.
You miss the point. Foreign imports are only half of the trade equation. Trade, by definition, requires the full equation of imports and exports. The southern economy was trade based and accounted for 75% of the entire nation's exports. If trade dies because a law creates a barrier to it, which is exactly what protectionist tariffs do, a trade based economy will be destroyed.
That a fledgling nation was trying to protect its nacent industries from foriegn competititon was rational.
No. It is irrational bunk. First, the United States in 1860 was not a "fledgling nation." It was well endowed with resources, growing in population, and had been around on stable footing for 75 years. Second, the "fledgling industry protection" claim is economic nonsense and an illegitimate argument for protection. It is a fact of economics that protective tariffs hurt the nation as a whole more than they help any given industry because of the dead weight loss from the protective tariff. This has been known since the 1810's when David Ricardo developed the modern economic concepts of trade.
That the southern supremists did not diversify their ecomony to keep more of their own capital in the south was not.
Much to the contrary. That the south developed its agricultural industry was perfectly rational and consistent with free market capitalism. Capitalist trade economics dictate that countries are best served by and tend toward production in markets where they have a comparitive advantage. The south's resources made gave it such an advantage and, as a result, its market developed around agriculture.
Yes, but rather than being a strength that was a weakness.
Nonsense. The whole of the nation's foreign trade was dependent upon the south's agricultural export ability. Without it, little trade would occur and without trade, the country as a whole is significantly worse off.
The south exported cotton to mills in europe and the north where the value added by manufacture equaled the price the raw cotton brought the south. The south then imported 2/3 of its clothing and other finished goods from the north or abroad.
There is nothing wrong with the importation of manufactured goods. Countries and regions specialize where they have comparative advantages. If the south is comparatively better able to produce cotton, and Europe is comparatively better able to produce textiles (as was the case in the 1860's), it serves the interest of both and results in greater overall welfare for both to specialize in the area of that comparative advantage. That fact is the basis of our entire concept of trade in free market capitalism. Granted, if you do not like free market capitalism, you are free to advocate something else. I'll simply note that human experience has shown that capitalism is the best economic system available and the one system that is most compatable with conservative sensibility and the maximization of liberty.
No, I'm afraid you have it all backwords.
Much to the contrary. The economic "theory" you have asserted in your post best resembles a combination of the fallacious arguments offered for tariffs today by labor unions and the long abandoned mercantilist garbage of previous centuries. The concepts you peddle were debunked in the 1810's by David Ricardo and abandoned in his wake due to their incompatability with capitalism.
Compared to the "foreign competition" in trade, (Britian, France, Spain and Russia) mid 19th century United States was a fledging. With regard to protective tariffs being "economic nonsense" lets see what Adam Smith had to say.
In manufactures, a very small advantage will enable foreigners to undersell our own workmen, even in the home market. If the free importation of foreign manufacturers were permitted, several of the home manufactures would probably suffer, and some of them, perhaps, go to ruin altogether, and a considerable part of the stock and industry at present employed in them, would be forced to find out some other employment. -Adam Smith (Wealth of Nations)
The whole of the nation's foreign trade was dependent upon the south's agricultural export ability. Without it, little trade would occur and without trade, the country as a whole is significantly worse off.
Your premise (that foreign trade in and of itself was good) is wrong. As the south's own experience proved, lack of economic diversity yeilds dependence on others for basic needs. The plantation economy survived solely on its ability (through slavery) to produce a raw material, cotton. I've already shown you how little real capital the south gained from this immoral practice.
That the south developed its agricultural industry was perfectly rational and consistent with free market capitalism.
-Yes, thats why the south was so dependent on the north for finished goods. Even the British ships would stop in northern ports first, because the market for their goods there was greater. Free labor produces consumers, slave labor does not. Were you asleep during economics in college?
From the experience of all ages and nations, I believe, that the work done by free men comes cheaper in the end than the work performed by slaves. Whatever work he does, beyond what is sufficient to purchase his own maintenance, can be squeezed out of him by violence only, and not by any interest of his own. -Adam Smith
The concepts you peddle were debunked in the 1810's by David Ricardo and abandoned in his wake due to their incompatability with capitalism.
Lol! The concepts you peddle are being debunked right here on this forum. I'll take free labor economics over slave labor economics every time. I'll take Adam Smith and "Made in America" over Ricky Ricardo and "Made in Communist China" any day of the week.
Adam Smith's theory of trade from 1776, though capitalist in nature and groundbreaking in itself, was flawed. It was a theory of absolute advantage rather than comparative advantage, the basis of free trade today. That latter concept was developed in the 1810's by David Ricardo. So put simply, Adam Smith was wrong about that one.
Your premise (that foreign trade in and of itself was good) is wrong.
Much to the contrary. It is a mathematical and economic fact that countries operating under a system of free trade achieve greater welfare as a whole than if that same country were to operate under a system of legally imposed barriers against trade.
I would also note for the record that your premise (that the model of an economy based on the manufacturing of goods is necessarily the best economic model for all regions everywhere and that, as a model, it is superior to economies of other concentrations) is itself a venture in the absurd. Free markets determine how economies develop. It does not come from some central command that has predetermined a certain economic concentration to be better than others and in doing so decided that that one concentration should be made to fit all.
As the south's own experience proved, lack of economic diversity yeilds dependence on others for basic needs.
Not necessarily. The south operated in its area of comparative advantage and that functions for the best of any model available as long as free trade is permitted. The south sought to permit that free trade and was denied it only by an act of military agression by their northern neighbor to prevent them from enjoying its benefits. As Frederic Bastiat famously noted, when goods do not cross borders, armies will.
-Yes, thats why the south was so dependent on the north for finished goods.
Actually, Europe would have likely been the provider of finished goods absent a war, as the northern tax policy after 1860 severely inhibited any trade with them from abroad. And on the same note, the north and europe were dependent upon the south for agricultural raw materials because neither had comparative advantages in that sector. That is why European states almost offered support to the confederate cause. It is also why the north experienced economic shortages of southern raw materials itself during the war. Trade is a two way street, you know.
Even the British ships would stop in northern ports first
Not after 1860, they wouldn't. The Morrill Tariff virtually killed off northern trade with Europe after barely a year.
Were you asleep during economics in college?
Much to the contrary as I minored in the field with a specialization in trade policy. You on the other hand appear to have slept soundly as you are peddling nothing more than an antiquated mixture of problematic trade theories, illegitimate tariff arguments, and 19th century mercantilism.
From the experience of all ages and nations, I believe, that the work done by free men comes cheaper in the end than the work performed by slaves.
That is a generally sound economic theory of Smith's, but it is of another issue than trade. It says little of the tariff issue and instead best resembles an attempt by you to throw in that infamous red herring to artificially distract from an otherwise economically clear situation of free trade versus trade barriers.
Lol! The concepts you peddle are being debunked right here on this forum.
If you honestly believe that your mercantilist rantings in defense of the inexcusable northern tariff policy are debunking the very same capitalist concepts that supplanted them 200 years ago, you are sadly mistaken. In fact, I would argue that such judgments on your part provide reason to question the health of your perception skills or, at minimum, your willingness to see that which you do not like but nevertheless remains there.
I'll take free labor economics over slave labor economics every time.
For the labor policy of an economic system, I will agree. But economies are much more than labor systems which, contrary to Karl Marx, are but attributes of any given economy.
I'll take Adam Smith and "Made in America"
Adam Smith was Scottish. America existed only in the latter end of his life.
over Ricky Ricardo and "Made in Communist China"
Ricky Ricardo was a cuban singer on a tv show. David Ricardo was a capitalist economist from Britain in the early 19th century. Communist China did not exist at the time he lived.
It is a mathematical and economic fact that countries operating under a system of free trade achieve greater welfare as a whole than if that same country were to operate under a system of legally imposed barriers against trade.
The supremist south of 1860 was not interested in the good of the whole country, just its own section. Lets use one simple example from that era to illustrate my point. In 1856 when southern Democrats LOWERED tariffs and added goods to the Free List, the industrial sector of Great Britian quickly undercut American producers of iron for the railroad. This quickly led to the recession (some say depression) of 1857, and the early rise of the Republicans in 1858.
But since we're mixing the past with the present lets use another simple modern example. According to you it is better to buy all our mechandise today from Communist China (just because its cheaper,) than it is to protect our domestic industries, or trade with countries whose comittment to democracy we wish to support. So what if China uses prison labor, or persecutes christians, etc.
Protective tariffs are very much part of capitalist economic theory, and are rational in many different situations. Furthermore, it was rational for mid 19th century America to be mildly protective of its fledgling major industries. But the supremist south with its backward single commodity ecomony and its eyes on other countries land and resources, wasn't interested in trying to achieve greater welfare as a whole, was it?
When you look at the deep south today, its funny how strong those confederates states are toward protection of their sugar subsidies, their textile industry, etc.. Why don't you preach some of that Ricardo theory to them? Tell'em Jeff Davis said it was a good idea. (Lol).
If that is your belief, make your case on why you consider it to be so. In the meantime, I need only note that it is the entire basis of modern trade economics. None of the competing theories come anywhere near it in reach. Not Smith's absolute advantage model, not hecksher-olin, and certainly not the mercantilism you peddle.
Adam Smith stated years before that protective tariffs, while rational as economic policy, should not be applied to "products of the soil".
And on matters of trade, Smith's theories were flawed. They failed to recognize comparative advantages.
Far from being "economic nonsense", protective tariffs are well represented in capitalist economic theory.
Not among economists! Trade is in fact the one area of that field where there is virtual unanimaty of consensus between competing schools of economic thought. Even the Keynesians on the left have consented that protectionist tariffs are, in almost all cases, illegitimate as economic policy and in conflict with the capitalism that even they admit to work best when it comes to trade.
The supremist south of 1860 was not interested in the good of the whole country, just its own section.
And it was perfectly rational for them to be so, just as it is rational for people to pursue self interest to this day. Your argument encounters problems though because the policy of free trade that the south advocated for itself out of its own interest also happened to be in the interest of the nation as a whole.
Lets use one simple example from that era to illustrate my point. In 1856 when southern Democrats LOWERED tariffs and added goods to the Free List, the industrial sector of Great Britian quickly undercut American producers of iron for the railroad. This quickly led to the recession (some say depression) of 1857
Bullsh*t. The panic of 1857 was caused by shifts in the world market as a result of the conclusion of the Crimean war and by corruption-induced industrial troubles at home in America. Specifically, as the war concluded the wheat demands it had created bottomed out. Overproduction occured and the wheat market collapsed causing an economic setback at the exact same time the continental European banks were being adversely affected by the war's conclusion. At the same all this was happening, several major railroad embezzlement scandals hit the fan shaking up their creditors on Wall Street, all of them already uneasy due to the wheat problem and shaky banking state in France. The banks then panicked and a recession set in. Northerners at the time fraudulently used the panic as an excuse to promote their illegitimate tariff policy, but practically all credible economic studies of the recession place the causes of it in those areas I just described.
But since we're mixing the past with the present lets use another simple modern example. According to you it is better to buy all our mechandise today from Communist China
No, not necessarily. There are some areas where China has comparative advantages that we may benefit from by doing trade, but that does not mean we should get everything from China nor COULD we get everything from China if we consciously set out to do so. As for their communist political system, it may be legitimate cause for sanctions of various degrees against China itself. That much I do not dispute. But those sanctions should come in the form of imposing trade barriers on them instead of imposing barriers on ourself to "protect" us from them.
Protective tariffs are very much part of capitalist economic theory
Nonsense. They constitute nothing more than government intervention to distort a free market and government action to redistribute wealth. Both of these items are directly in conflict with free market capitalism by their very nature.
and are rational in many different situations.
Not really. The legitimate uses of protectionist tariffs are extremely few and generally apply in only a limited number of foreign policy-related cases. 99% of the calls for protective tariffs are not among these cases and are economically illegitimate arguments.
Furthermore, it was rational for mid 19th century America to be mildly protective of its fledgling major industries.
No it wasn't. Protection of fishing diminishes the consumer surplus by raising the price (we'll denote that as "C"). A portion of that consumer surplus is redistributed to the producer surplus (denoted as "P"), though far from all of it. Of the remainder of C-P, it divides between two parts. The first is that which returns in a small ammount of government revenue (we'll call this "G"). The remainder is a dead weight loss that escapes the home economy (we'll call that "L").
Expressed mathematically: C=P+G+L, or the area that shifts as a result of the tariff's price rise. Absent the protective tariff on fishing, the economy retains all of C as a consumer surplus. The economic welfare of the country without a tariff, denoted as "W," includes all of C.
Now let's look at what happens mathematically with the tariff. Subtract C from Wt (Wt means W with the tariff) because of the price rise after the tariff. P is transfered out of C to the fishing industry and returns to the economy, so add it back to Wt. You may also add G to Wt as it returns in the form of government expenditures, though they will as a general rule be spent less efficiently there.
Since L is lost, the tariff leaves us with Wt + -C + P + G. Since C = P + G + L, it may be substituted in giving us Wt + -P + -G + -L + P + G. Combine the terms, and Wt = -L. That makes Wt < W
Hence the nation's welfare with the tariff is less than the nation's welfare without it.
When you look at the deep south today, its funny how strong those confederates states are toward protection of their sugar subsidies, their textile industry, etc..
Not exactly. The former CSA states are almost all Republican now save a few Democrat holdovers who win reelection on 90% black votes combined with a Democrat minority among everyone else. Republicans as a general rule tend to vote free trade in Congress. Where they push for tariffs, it is generally through Democrats like Mary Landrieu.
Why don't you preach some of that Ricardo theory to them?
Cause most Republicans already understand it and vote in support of it. I suppose I could try with the 'rats, but I don't believe I'll have any success. No ammount of truth will sway a 'rat when he is bought and paid for by the AFL-CIO and the NAACP to vote otherwise.
1) There are no transport costs.
2) Costs are constant and there are no economies of scale.
3) There are only two economies producing two goods.
4) There are no tariffs or other trade barriers.
5) There is perfect knowledge, so that all buyers and sellers know where the cheapest goods can be found internationally.
Any one of these rules is easily broken , especially when the theory is applied to the southern section of 1850-1860. And we haven't even started talking about Cotton Factors yet.
Even the Keynesians on the left have consented that protectionist tariffs are, in almost all cases, illegitimate as economic policy and in conflict with the capitalism that even they admit to work best when it comes to trade.
And your supporting Keynesian references are...?
The supremist south of 1860 was not interested in the good of the whole country, just its own section.
Ah, something we agree on, how refreshing. In the mid 19th century, the immoral southern slave powers were working against the national interest of the United States to line their own pockets.
The panic of 1857 was caused by shifts in the world market as a result of the conclusion of the Crimean war and...practically all credible economic studies of the recession place the causes of it in those areas I just described.
again, your supporting references are...?
As for their communist political system, it may be legitimate cause for sanctions of various degrees against China itself. That much I do not dispute. But those sanctions should come in the form of imposing trade barriers on them instead of imposing barriers on ourself to "protect" us from them.
You've conceded the point. Sanctions and trade barriers both restrict foreign goods into our domestic market (as do tariffs), and break Ricardo's Theory of Comparitive Advantage.
Economic Protections, irrespective of the REASON for which they are employed, are part of capitalist economics after all. Life is good!
I'll leave you with two questions. First, can you provide evidence that David Ricardo had any influence over the southern position on tariffs in 1850-1860? For example does the chairman of the Senate finance committee and your great friend Senator Hunter reference the theory of comparative advantage in any of those windy speeches you like to quote?
Secondly, what does the theory of comparative advantage say about the United States drilling for crude oil in ANWAR, versus buying crude at the lowest price on the international market?
A brief glance over them indicates that, rather than the comparative advantage concept assuming them to be true, the elementary textbook/website you got your list from sets forth those assumptions to be true in the hypothetical examples it offers of the Ricardan model. A closer examination reveals the unfounded nature of your complaints with each:
1) There are no transport costs.
That is the same fallacy that trapped The Lincoln in his attempts to dismiss free trade. While most simple theoretical examples given in textbooks assume there to be no transport costs, no real reason exists why transport costs themselves cannot be included in a real world situation. Further, the act of trade itself, especially in the ocean-going sense, tends to lead to efficiency in transport costs to a point that makes them minor and often counter-weighted by the imports being traded for. In short, it simply makes no sense to put a tariff up against an import due to minor transport costs in the act of delivery.
2) Costs are constant and there are no economies of scale.
When costs change in a way to shift comparative advantages, so does trade. Though it is often assumed that costs are constant in hypothetical textbook examples, the Ricardan system is adaptable to these changes in market conditions so long as the markets are free.
3) There are only two economies producing two goods.
And I have no doubt that the textbook/website you got your list from assumes that to be true for its examples. In the real world though many goods exist yet comparative advantages still occur.
4) There are no tariffs or other trade barriers.
In order for the model to work best, tariffs and non-tariff barriers should be removed. That is why advocates of free trade seek to remove them. In fact, no model of trade works well when barriers exist to prevent that trade.
5) There is perfect knowledge, so that all buyers and sellers know where the cheapest goods can be found internationally.
Imperfect knowledge occurs under capitalist theory. Does that mean capitalism is wrong? No, and much to the contrary as it happens that capitalism trends toward acquiring reasonably complete knowledge around which a decision is made.
Any one of these rules is easily broken, especially when the theory is applied to the southern section of 1850-1860.
First off, your premise fails you as your list of "reasons" is obviously from an elementary hypothetical demonstration of the model set up in a textbook or on a website. Second, even if they did not occur, free markets tend to compensate as I noted above. In other words, you lack any real grounds to throw out the Ricardan model.
And we haven't even started talking about Cotton Factors yet.
Talk about whatever you like.
And your supporting Keynesian references are...?
Practically any econ text used by a major university. Aside from the supply side and public choice enclaves, many of these departments are dominated by Keynesian leftists. Yet all the major textbooks they use are friendly to free trade. It is perhaps the one area of nearly unanimous agreement among economists.
Ah, something we agree on, how refreshing. In the mid 19th century, the immoral southern slave powers were working against the national interest of the United States to line their own pockets.
Much to the contrary. Free trade was in the nation's national interest at that time and, as an economic policy, the south advocated free trade. It therefore follows that the south was acting in a manner consistent with the nation as a whole. And as a side note, try as you may to flap that red herring of slavery around at points in this discussion when you find a diversion necessary, my interests here remain with an economic analysis of the trade situation. Insofar as your comments go, you have not demonstrated any relevance of your slave fish beyond obscuring the progression of the topic of trade. They therefore merit no further attention of my own.
again, your supporting references are...?
If you want an authority on that interpretation, look it up in an economic history book. I've already offered you sufficient details on what happened and how it happened. And for the record, I certainly didn't see any supporting references for your silly claim that tariffs caused the recession, much less an explanation. You simply spouted off with it, never once explaning your theory, and assumed that by posting it you made it so. Quod gratis asseritur, gratis negatur.
You've conceded the point. Sanctions and trade barriers both restrict foreign goods into our domestic market (as do tariffs)
Yes, only tariffs hurt us more than sanctions. If we blockade an enemy, we stop its goods from leaving that country and entering the world market. When we put a tariff up for the same reasons, we prevent goods on the world market from entering our country - in effect we are blockading ourselves.
and break Ricardo's Theory of Comparitive Advantage.
No. Tariffs and trade barriers violate free trade in general. Ricardo's model, which you still have yet to grasp, says that nations prosper the most when trade is free. Complaining that the a nation isn't prospering at its optimum level when trade isn't free is reason itself to remove those tariffs. Just the same, complaining that a model that urges conditions making free trade optimal should yield in its goals because tariffs exist is itself absurd. We should no more abandon Ricardan free trade to leach off of redistributionist tariffs than we should burn our paychecks to qualify for welfare.
I'll leave you with two questions. First, can you provide evidence that David Ricardo had any influence over the southern position on tariffs in 1850-1860?For example does the chairman of the Senate finance committee and your great friend Senator Hunter reference the theory of comparative advantage in any of those windy speeches you like to quote?
He makes a Ricardan free trade argument in that very same speech (see congressional globe 36-2, pp. 898-905).
Secondly, what does the theory of comparative advantage say about the United States drilling for crude oil in ANWAR, versus buying crude at the lowest price on the international market?
ANWR constitutes a domestic resource that has been placed out of reach from our own production by non-economic regulatory measures (i.e. enviro-wacko land use restrictions). Since it is not open and since oil prices fluctuate, it is difficult to predict the exact circumstances of what would be produced from ANWR, though likely it would lower oil prices barring that production doesn't drop off elsewhere. In the event that it was open, the Ricardan model would hold that it should be used to produce oil where doing so produced a comparative advantage.
That even a simple example of Ricardo's theory requires a half dozen rules demonstrates the weakness of the theory when applied to the real world. You seem to be suggesting that in more complex situations that those rules are not needed for the theory to work.
While most simple theoretical examples given in textbooks assume there to be no transport costs, no real reason exists why transport costs themselves cannot be included in a real world situation.
OK. At your suggestion I have begun to consider transport costs whenever I consider the theory of comparative advantage.
Further, the act of trade itself, especially in the ocean-going sense, tends to lead to efficiency in transport costs to a point that makes them minor and often counter-weighted by the imports being traded for.
Which do you think is cheaper, transporting cotton over to England by ship, or transporting cotton to Massachusetts by rail? Which method is safer? Which method costs less to insure?
3) There are only two economies producing two goods.
And I have no doubt that the textbook/website you got your list from assumes that to be true for its examples. In the real world though many goods exist yet comparative advantages still occur.
I'm not sure you even understand the Ricardo's theory, or you wouldn't have made this comment.
The supremist south in the mid-19th century was not practicing anything that approached comparative advantage. That you postulate it did is absurd, and as I have shown you easily disproved. You should sue the school that gave you a diploma, if indeed you ever went.
Your logic is fallacious and demonstrates a failure to grasp the purpose of including those "rules." The rules you listed were to set the conditions and parameters under which a hypothetical example being offered in your textbook or website was to be conducted. Those conditions may or may not be indentical to every case we encounter, but for the purpose of any hypothetical in any theory, some sort of parameters must first be decided upon.
You seem to be suggesting that in more complex situations that those rules are not needed for the theory to work.
No. I am suggesting that an author's set of parameters for a simple hypothetical situation from a textbook says very little of a theory's operation in other conditions.
OK. At your suggestion I have begun to consider transport costs whenever I consider the theory of comparative advantage.
Rather that "whenever" you use the theory, try to first determine that transport costs happen to be a significant factor in that particular case.
Which do you think is cheaper, transporting cotton over to England by ship, or transporting cotton to Massachusetts by rail? Which method is safer? Which method costs less to insure?
It all depends on any number of circumstances. If a ship from England just dropped off its hold of imports from England and will be returning there regardless, he may be inclined to take with him a shipment of cotton at a discounted rate rather than let his hold remain empty on the return voyage. Same could go for a railroad.
I'm not sure you even understand the Ricardo's theory, or you wouldn't have made this comment.
To the contrary. You are operating under a hypothetical model of set parameters, one of which is a situation involving two countries. That itself in no way prohibits two countries from trading with each other on comparative advantages in a world market place where many such situations and many countries occur.
The supremist south in the mid-19th century was not practicing anything that approached comparative advantage.
If the south had no real comparative advantages in cotton production, as you assert, then why didn't Vermont grow it and ship it to neary massachussetts?
That you postulate it did is absurd
Not in the least. The southern climate and land makes its cotton-producing ability greater than, say, Canada. Canada could theoretically try to produce cotton I suppose, but for the resources they put into it they would never come anywhere near achieving what the south does with the same. Therefore the south has the advantage over Canada, making it absurd for Canada to produce cotton.
and as I have shown you easily disproved.
Easily disproved? Ha! You posted a list of parameters from a hypothetical example in an introductor econ textbook or website! Your entire course of argument lacks any significant merit whatsoever beyond the fact that you did a cursory search for information on a subject you obviously do not understand.
You should sue the school that gave you a diploma, if indeed you ever went.
Thanks but no thanks, son. Absent an economics background, I would be spouting the same mercantilist nonsense you are right now. Considering that you have shown yourself to be quite the fool, I do not see anything desirable to be gained by abandoning an education.
It all depends on any number of circumstances. If a ship from England just dropped off its hold of imports from England and will be returning there regardless, he may be inclined to take with him a shipment of cotton at a discounted rate rather than let his hold remain empty on the return voyage. Same could go for a railroad.
You are either a complete moron or engaged in another exercise of intellectual dishonesty.
Cotton produced on plantations in the south was sold to "Factors" who acted as middlemen or agents for the plantation owners. The Factors also loaned money to the plantations at interest, and of course collected commisions on the sale of the cotton to "brokers" who represented investment houses, importers, and textile/ manufacturing interests. Plantation owners also paid their Factor for hauling, storage, and insurance on their product. Factors often took cotton as payment and used their superior knowledge of fluctuating commodity prices to further increase their profit, at the expense of the cotton producer.
Next, the idea that English merchant vessels were arriving at American ports with no manifest for another cargo is absurd (and false), as is your postulation that the slave owning south was engaged in anything approaching Ricardian, comarative advantage free trade.
Antebellum southerners, drunk with the notions of "King Cotton" and "white supremacism", foolishly spent their time trying to expand their slave empire, while remaining hopelessly dependent on northern and foreign manufactured goods. Its one of the reasons the south lost the Civil War.
If you need a deposition to support your claim that the college you attended failed to educate you, let me know.
Much to the contrary. To note the simple economic fact, as I did, that shipping costs for any number of reasons may differ by mode, means, and time is neither dishonest nor moronic. It is valid to say though that persons who deny this reality easily qualify for both of those terms though. That would include The Lincoln and you.
Cotton produced on plantations in the south was sold to "Factors" who acted as middlemen or agents for the plantation owners.
That's nice. And on today's commodities markets, we have brokers, agents, hedgers, investors, financers and any number of various similar roles that function at the intermediary stages between agricultural planters and the final use of their produce. Cost wise, it throws another factor into the mix, but I have yet to see a case where it has stopped trade or produce from occurring in a reasonable fashion.
Next, the idea that English merchant vessels were arriving at American ports with no manifest for another cargo is absurd (and false)
You are misreading what I said (perhaps intentionally) as that is precisely the point - merchants are inclined to maximize their own gain from a voyage and are therefore inclined toward taking cargo on a return voyage, be it previously arranged or on the spot. In the event that a choice between an empty return voyage and a full one emerges, the merchant will be inclined toward the full one and that, in itself, alters the cost of shipping in relation to the alternative.
as is your postulation that the slave owning south was engaged in anything approaching Ricardian, comarative advantage free trade.
As I asked you previously, why did they not produce cotton in Vermont? If you can answer that, then you should know what a comparative advantage is. If you do not know the answer to that, then as a word of advice to ensure your personal financial health - stay away from agricultural commodities markets, agricultural futures, and going into farming on your own.
Antebellum southerners, drunk with the notions of "King Cotton" and "white supremacism", foolishly spent their time trying to expand their slave empire
You keep ranting and raving to that end without showing any further cause. Repeating that will not make it so any more than flapping your arms at a high speed will give you flight. Just a word of advice, you know. Oh, and let me know if you ever become airborne.
If you need a deposition to support your claim that the college you attended failed to educate you, let me know.
If I ever desired a deposition from an economically backwards and uneducated fool who worships at the feet of tyrants, I think with good reason that I should be able to find a person with, at minimum, a higher profile than your own out of the old Soviet Union. Not that I don't think a GED is grounds to deny you a job or anything - I'm just saying that if I ever had to bring idiots into my company, I'd pick ones that were more interesting than you.
Oh, and for the record, you have yet again neglected to refute my mathematical proof of your error on the issue of tariffs. Did you sleep through the math portion of your GED prep course, or are you simply afraid to admit that you are flat out wrong?
Lol! thats your strawman not mine. You've already started to refute it yourself, or did someone else say this
...we have brokers, agents, hedgers, investors, financers and any number of various similar roles that function at the intermediary stages between agricultural planters and the final use of their produce. Cost wise, it throws another factor into the mix,
Let me know when you have perfected your equation, ok?
Oh Yeah, you never directly answered the question whether it was cheaper to ship cotton to Massachusetts or England. I wonder why?
Evidently your literacy level leaves as much to be desired as your glaringly deficient understanding of markets. The mathematical proof I offered demonstrated the negative influence in a country's welfare that is inescapably brought about by a protective tariff, not an equation of brokerages and commodities. Of that latter instrument, you have yet to demonstrate how market intermediaries somehow make tariffs necessary when in fact, under a free market, that market will adjust and incorporate such costs on its own and continue to trend toward trade where the comparative advantages exist.
Oh Yeah, you never directly answered the question whether it was cheaper to ship cotton to Massachusetts or England.
Yes I did. It's all dependent upon the factors of shipping. That means sometimes railroad will be better, and other times steamship will be better. Besides, do you seriously think a cotton producer cares where his product goes once he's sold it? In case you do not remember, the object is to make a sale, not satisfy some command style centrally orchestrated assignment of X deliveries by train and Y by boat to fulfill the massachussetts "great leap forward" plan.
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