You can’t trust ultraglobalists

You can’t trust ultraglobalists

Ultraglobalists carefully choose their words. They use the word Isolationism which has a negative connotation. They also do not put the word economic in front because isolationism has other aspects as well. On the other hand autarky has a positive connotation and they avoid it like the devil avoids holy water. Economic isolationism is the flip side of economic autarky. The more self-sufficient is an economy, the less it needs to trade with the rest of the world.

Let’s look at the notorious example that David Ricardo used to support comparative advantage and free trade. He took two countries and two products. England could benefit by specializing in textile production and Portugal could also benefit by specializing in wine production. Ricardo was a British investor and politician. He used these two countries because he was of Portuguese origin.

Ricardo’s effort is respectful. Economic models are helpful because they give us insight into economic reality but they are not reality. We should not take them for real. In reality there are not two countries in the world and they do not produce two products only.

At the time, England and Portugal had much smaller GDP’s. Let’s take todays circumstances. UK’s GDP is a little less than California’s and Portugal’s almost equal to South Carolina’s which the 26th state in terms of economic size. In USA there are 56 states and territories. So, in addition to California and South Carolina, there are 54 more country-like states and territories. A lot of trading could be achieved within states and territories and there would be no need for much trading with the outside world. USA has diversified climate and specialization within the country. In California there is show business and high tech, in New York financial services, in Midwest agriculture, in Texas oil production, in Michigan auto manufacturing etch.

Perhaps there is a certain size where relative economic autarky becomes feasible and that size could be smaller than USA’s. The bigger a market is the more self-sufficient it can be. This is somenting similar to Economic size matters. We are not talking about absolute autarky but relative. There will be trading but less. The same could apply for China and Western EU.

This could also be true for the other economic blocs that may be formed (A pentarchy). Even division or regions in blocs can have a relative autarky to a lesser extent. Off course somebody would have to make a serious research for that and we are not planning on doing it. We are saying that a valid argument could probably be made for relative autarky when we have a GDP like USA’s, China’s and WEU’s. 

Trading is something different than travelling, cultural and scientific exchanges, transfer of knowledge, international athletic events, etch. Trade could be unproductive and bad for the environment. A New York resident may find a Chinese made computer cheaper than a California made one. Although there are definitely more transportation costs, the difference in salaries makes up for that. From a productivity point of view, the China made product is unproductive. Probably more human hours were required and more gas or oil was consumed. Ships, airplanes, trucks run on gas or oil.

Ultraglobalists drag that poor kid, Greta Thunberg, around the world to make a fuss about environmental protection, while they support trade that as we have explained causes damage to the environment. Speaking of the environment, there two main reasons for environmental damage, overconsumption and overpopulation. Overconsumption is mostly in advanced countries and overpopulation mostly in less advanced countries. Various numbers have been used for World’s optimal population, like 500 million or 1,6 billion. A serious study should be made about that.

Ultraglobalists support both overconsumption and overpopulation. They cherish economic growth which is based on overconsumption, the creation of needs that are not real. They favor open borders. The message they give to citizens of poor countries is that they can have as many children as they want because most of them can migrate to advanced countries, have a relative comfortable life and sent money home.

Ultra-globalists are either fools or they take you for fools. Probably both happen. They are a coalition of smart evil people that know very well what they are doing and people with distorted vision because of foolishness, thoughtlessness, ignorance, fanatism, theoretical thinking. In either case, you can not trust them.