Description
The assignment is to read the following two essays on comparative advantage and trade, then write a response essay on the topic.
1. The first essay is by the economist Paul Krugman, who is a columnist for the New York Times. He won the Nobel Prize in Economics in 2008 for his contributions to trade theory. The Nobel Committee explains,
"Traditional trade theory assumes that countries are different and explains why some countries export agricultural products whereas others export industrial goods. The new theory clarifies why worldwide trade is in fact dominated by countries which not only have similar conditions, but also trade in similar products – for instance, a country such as Sweden that both exports and imports cars. This kind of trade enables specialization and large-scale production, which result in lower prices and a greater diversity of commodities."
Krugman's essay is from a book of essays on international economics. The essay is called "Ricardo's Difficult Idea" and discusses why he believes so few people share the consensus of professional economists on comparative advantage.
Link to the essay: http://web.mit.edu/krugman/www/ricardo.htm (Links to an external site.)
2. The second essay is titled "A Petition" by the 19th Century political economist Frederic Bastiat. The essay is sometimes also referred to as "The Candlemaker's Petition", and it is a satirical essay that deals with common objections to international trade.
Link to the essay: http://econlib.org/library/Bastiat/basSoph3.html#S.1, Ch.7, A Petition (you may have to copy and paste this link).
The assignment is to write a response to these essays that discusses the following questions:
1) Who was the audience for each essay? How did those audiences differ?
2) Are the arguments presented largely positive or normative? Do the authors tones differ?
3) What positive argument is each author giving in support of open trade? Do they directly address common objections?
Your response should not exceed 2000 words, and should be at least 1250 words.
school finance school international trade
Explanation & Answer
sorry for the inconvenience i accidentally sent the draft copy i have attached the screen shot for the plagiarism final document . thanks for understanding
Running Head: FREE TRADE AND COMPARATIVE ADVANTAGE
Name
Lecturer
Institution
FREE TRADE AND COMPARATIVE ADVANTAGE
The easy referred to as the petitioner was penned down by Bastiat who was French economist
and author. The petition was on behalf of several manufacturers that comprised of Candles,
Tapers, Lanterns, Candlesticks, Street Lamps, Snuffers, and Extinguishers, and from the
Producers of Tallow, Oil, Resin, Alcohol, and Generally of Everything Connected with Lighting
(Bastiat,1845). The audiences for this petition were mainly the lawmakers in the chamber of
deputies who were tasked with making laws of the country that touched on how trade was carried
out between France and its trading partners.
The analysis of who are the audiences of this petition can be derived from words from the
petition when he says that” We come to offer you an excellent opportunity for applying your—
what shall we call it? Your theory? No, nothing is more deceptive than theory. Your doctrine?
Your system? Your principle? But you dislike doctrines. You have a horror of systems, and, as
for principles, you deny that there are any in political economy; therefore we shall call it your
practice—your practice without theory and principle” (Bastiat,1845). His main agenda for this
petition was to enlighten these honorable members on the importance of making laws that
encourage free trade. He also emphasizes how protectionist policies between France and her
trading partners have made it impossible for free trade to thrive and how eventually they hurt the
economy they very try to protect by coming up with such policies.
On the other hand, the writer Ricardo difficult ideas essays also seek to explain why people fail
to understand ideas and theories that resonate on the need to have free trade and entrench the
ideas of comparative advantage in the international economy. In doing so most of the audience if
this essay is intellectuals who in many cases values ideas, but finds ideas on comparative
advantage and free trade impossible to grasp. He emphasizes that his primary objective in the
essay is to try and explain why economist consistently balks at the concept of comparative
FREE TRADE AND COMPARATIVE ADVANTAGE
advantage. He wonders” Why do journalists who have in-depth knowledge about world affairs
begin squirming in their seats if you try to point out how trade can lead to mutually beneficial
specialization? Why is it almost impossible to get a discussion of comparative advantage, not
only onto newspaper pages but even into magazines that cheerfully publish lengthy discussions
of the work of Jacques Derrida? Why do policy wonks who will happily watch hundreds of hours
of talking heads droning on about the global economy refuse to sit still for the ten minutes or so
it takes to explain Ricardo? (Krugman. 1996).
The audience for the two essay differs significantly in that for the petitioner essay the audience
does not know about comparative advantage and free trade but have been tasked with an
enormous task of making laws that can entrench those ideas. Therefore they need to be
enlightened on why there is need to reform some of the economic policies that discouraged free
trade and contributed to the reverse of the economic gains purportedly meant to achieve by the
same laws they have set up. For the Ricardo difficult idea essay audience, they are different in
that these are intellectuals that have adequate knowledge on comparative advantage theories and
models but have refused to accept these principles and apply them to international trade and
practices. Mainly they discard them without interrogating them further to see how their
application in trade can lead to entrenchment of free trade that can be beneficial to different
countries who are trade partners.
The two easy mainly portly positive arguments where according to positive economic arguments
they do not have necessary to be correct, but they must be able to be tested and proved or
disapproved. This is evident in Bastiat argument when he gave the example of France consuming
more tallow. ; you would eventually lead to more cattle and sheep and consequently increase in
cleared fields, meet, and also manure enhances the basis of all agricultural wealth. When giving
FREE TRADE AND COMPARATIVE ADVANTAGE
the need to put down protectionist laws he gives a statement that shows what causes rises in
prices of commodities between Paris and Brussels. He realized that that the rise in price resulted
from the existence of obstacles of various kinds between Paris and Brussels. First, there was the
distance; which mostly leads or loss of time, and we must either submit to this ourselves or pay
someone else to submit to it. Then come rivers, marshes, irregularities of terrain, and mud; We
succeed in doing so by raising causeways, by building bridges, by laying and paving roads, by
laying steel rails, etc. But all this costs m...
Review
Review
