Free trade is garbage

Betting on black or red in roulette has almost 50 - 50 chances of winning. Both European and American roulettes have 36 numbers, 18 black and 18 red. European roulette has one 0, while American has 0 and 00. When 0 or 00 come, the house wins. In European roulette the chances of getting black or red are 18/37 = 48,65% while in the American 18/38 = 47,37%.

Participating in free trade is like betting black or red in roulette but players do not have the same chances. More competitive countries have more than 50% chances and less competitive less. For instance, countries could have 35%, 40%, 45%, 50%, 55%, 60%, 65% chances to benefit. Competitiveness is a continuum. Suppose we could rate competitiveness from 1 to 7. The following could be the chances; 1 - 35%, 2 - 40%, 3 - 45%, 4 - 50%, 5 - 55%, 6 - 60%, 7 - 65%.

But 65% chances are not 100%. So even with 65% chances to benefit, countries may end up being harmed. Those with the lower chances, not only gamble but also have few chances to benefit. If we take 20 countries with 35% chances to benefit, 35% X 20 = 7 will benefit and 13 will be harmed. If we take 20 countries with 60% chances to benefit, 60% X 20 = 12 will benefit while 8 will be harmed. Only if the chances are 100% all 20 countries will benefit.

If people want to bet, they go to the casino. There is a lot of online betting as well. Even buying bonds and stocks has some gambling. It is not just gambling, most of it is based on knowledge but there is a random part as well. Economic policy is not an area for gambling. With free trade, countries have no control of their trade and gamble. They could benefit or they could be harmed. Benefit and harm could be small or large.

When a country is more competitive than another in one sector, it can produce same quality products at lower prices. Competitiveness is determined by a) productivity b) price level. A country's productivity is the average of productivities in all production sectors. A country's price level is the average price level of all products and services in the economy.

In order to determine if a country is more competitive in one product, averages are insignificant. What really matters is a) productivity in the production of the specific product and b) prices of goods and services that are used in the production of the specific product. A country can be more competitive than another in averages but less productive in certain sectors.

In Table D of Appendix 23, we presented a case where both countries can have an increase in production due to free trade. This is not necessarily a win - win situation. The sectors in which country A is more competitive may have higher productivity. Productivity can be improved. Both Advantage theories have a static view. Country B would not want to "give away" to country A sectors with high productivity.

Productivity is closely related to GDP per capita. It is not possible to have all production sectors with high productivity but the higher the percentage of a country's production in high productivity sectors, the richer a country is. So although the case in Table D of Appendix 23 may seem like a win - win situation, only by judging the increase in production the two countries may initially have, it may not be a win - win situation in the long term.

We should explain that productivity can be expressed in quantity of products or monetary value. In order to be able to compare and add productivities in different sectors and find the totals and averages, productivity has to be expressed in monetary value. Productivity in monetary values is determined by a) productivity in quantity b) prices. Productivity in monetary value is affected by changes in prices as well.

In order for country B to be able to improve productivity in certain sectors where it is less competitive than country A, it must protect these sectors. Having low productivity is not a reason to give away sectors to other countries. The opposite may be true though. Countries may not want to produce in low productivity sectors. The higher the percentage of GDP in lower productivity sectors, the poorer a country is.

Nevertheless, it is better if people work in low productivity sectors than if they do not work at all. If a country does not want to produce in low productivity sectors, imports will have to fill the domestic consumption. Countries that can't compete in high productivity sectors, may take advantage of the unwillingness that more advanced countries may have to produce in low productivity sectors.

Countries should not give away high productivity sectors to other countries with higher productivity because productivity can be improved. So what are the reasons for specialization? There are only two reasons for specialization a) NATURAL CONDITIONS and b) ECONOMIES of SCALE. Natural conditions include soil, climate, terrain morphology, subterrain. Terrain morphology is seashores, islands, hills, mountains, valleys, rivers, lakes.

Scandinavian countries are in the North of Europe while Mediterranean are in the South. They are all surrounded by sea. Perhaps Scandinavian may be more productive than Mediterranean countries in tourism. Due to climate and quality of beaches, Mediterranean countries can specialize in summer tourism while Scandinavian can't. Also, due to climate conditions and soil quality, Mediterranean countries can specialize in wine and olive oil production.

We should remind that tourism and agriculture are low productivity sectors. So countries that specialize in those must also specialize in some high productivity sectors. Minerals and fossil fuels are not everywhere. Often these should be processed close to where they are extracted. So countries that have them specialize not only in extraction but also in processing.

Economies of scale is another important reason for specialization. When there are economies of scale, per unit cost decreases as production increases. In order to have the lowest possible per unit cost, high volume of production may be needed. This may be much higher than local consumption, especially in small countries. So countries that produce more than local production must export their surplus. 

Specialization can be beneficial. Specialization requires trade, not free trade. Specialization should be attempted in a way that there are only winners, ALL SIDES BENEFIT. This is accomplished in ANTINWO's SUPERB ECONOMIC and ORGANIZATIONAL GROUP MODEL. In FREE TRADE, there may be overall a benefit from specialization but it is a GAMBLE with WINNERS and LOSERS, like in a CASINO. In AntiNWO's superb model, there is BENEFIT from SPECIALIZATION and ONLY WINNERS.

FREE TRADE is CARBAGE. Free trade is the most important of EU's fundamentals. All EU's fundamentals are fundamentally wrong, garbage. EU is GARBAGE. NWO is GARBAGE. NWO - EU fanatics have no clue. They do not know what they are doing and have caused an enormous damage to millions of people around the world. NWO governments should be replaced with AntiNWO governments the soonest possible .