Why does trade matter?

Author: Lemming
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#1
Lemming
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Why does trading with more people matter?

I can understand the importance of technology, more people, means a scientific problem is solved sooner, thus there is value in trading technology, that oneself is not left in stone age.

I understand that some groups due to environment, secrecy, copyright, or choice,
Have monopolies,
Crops grow better in some regions, only Greeks know how to make the Fire, Coke is owned by a company, Detroit makes the cars.

But once you have a location, within your own territory, or a partner, what does it matter if someone refuses to trade?
Take the American Confederacy, Britain, and India,
As I recall, the Confederacy tried to use fact that Britain traded for their cotton as diplomatic leverage, but Britain simply shifted to using India more for cotton.

The Greeks had the secret of Greek Fire, 'but technology is possible to be discovered by others.
Modern Flamethrowers, Roman Concrete forgotten then reinvented, so on.

Coke has copyright on Coke,
But WWII Germany can just invent their own soft drink, Fanta. One also see's countries ignore copyright, and create their own knockoffs of culture, China and it's banning of certain Western media, and conveniently inventing their own similar.

Detroit made the cars, until they didn't, we all know what happened to Detroit.

. . .

I also understand what investments 'can be made in other countries, and it hurts when these investments are 'suddenly taken away or illegally confiscated.
But surely not all one's 'necessities are invested in other countries?
#2
oromagi
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Wikipedia
In one modern view, trade exists due to specialization and the division of labor, a predominant form of economic activity in which individuals and groups concentrate on a small aspect of production, but use their output in trades for other products and needs.  Trade exists between regions because different regions may have a comparative advantage (perceived or real) in the production of some trade-able commodity—including production of natural resources scarce or limited elsewhere. For example: different regions' sizes may encourage mass production. In such circumstances, trade at market prices between locations can benefit both locations.

As I recall, the Confederacy tried to use fact that Britain traded for their cotton as diplomatic leverage, but Britain simply shifted to using India more for cotton.

"For much of Great Britain, however, the Civil War meant disaster for the cotton trade. The manufacture of cotton cloth and thread was by far the country's largest industry in the mid-nineteenth century. It employed more than 600,000 people in England directly. Indirectly (through family units or other trades), nearly four million people, or one sixth of the English population, were dependent upon cotton for their livelihoods. When the Civil War began, the United States supplied about eighty percent of Britain’s raw cotton, and almost all of it arrived through the port of Liverpool. As a result of the Union’s blockade and the Confederacy's embargo, this figure fell to almost zero in August 1861, and American cotton did not exceed three percent of British imports while the war lasted. Although British merchants could obtain cotton from other regions, such as India and Egypt, Britain still received less than fifty percent of the raw material it needed during the war. As a result, mills closed, workers lost their jobs, and England's cotton manufacturing districts in the counties of Lancashire and Cheshire experienced widespread poverty."

So, 16% of all English people ate on what they did with American cotton before the war, that dropped by half after the embargo.  So, 8% lost their livelihoods and unemployment went up by maybe 15-20%.  Pretty catastrophic, really.  Same thing to a lesser degree in France.

The Greeks had the secret of Greek Fire, 'but technology is possible to be discovered by others.
I've read we still haven't figured out exactly what Greek Fire was.  We've found the nozzles for it so it was some kind of liquid napalm like stuff but we may never know exactly what.

But WWII Germany can just invent their own soft drink, Fanta.
Fanta was not a knock-off, it was just a rebranding.  Coca-Cola still owns Fanta and Fanta colas in Nazi Germany were the same recipe, Coke just didn't honor the US trade embargos (neither did Standard Oil for a while,  who were the only ones making the leaded gas necessary for German bombers and fighters).

Detroit made the cars, until they didn't, we all know what happened to Detroit.
Detroit still makes the majority of American motor vehicles and employs better than 2/3rds of all Americans autoworkers.  It has declined quite a bit and doesn't pay like it used to but Detroit is still making a lot of cars.


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#3
Lemming
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@oromagi
I agree with the idea of scarce resources of certain types, at times, encouraging trade,

But it seems a mistake, to tie one's job market to other countries, without a fallback. (IE Cotton Job Loss)

Fair point on Greek Fire.

I 'think, but am not certain that you are wrong about Fanta and Coke,
Coca-Cola HQ in Atlanta also cut off communications with Keith in Germany and halted the export of Coca-Cola’s 7X flavoring (the long-mythicized, top secret formula for Coca-Cola syrup).
Working with his chemists, Keith patched together a recipe within the limitations imposed by wartime rationing. It was basically made from the leftovers of other food industries: fruit shavings, apple fibers and pulp, beet sugar, and whey, the liquid remaining after milk has been curdled and strained during cheese production. To name this concoction, Keith told his team to use their imagination. Joe Knipp, a salesman, pitched “Fanta,” shorthand for the German word for “fantasy.” It stuck.

Fair point about Detroit,
And there 'were more factors in cities decline than 'just motor industry,
I mention it mainly, as 'other people can make cars too,
Which was one of the factors that lead in decline.
#4
Discipulus_Didicit
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@Lemming
I agree with the idea of scarce resources of certain types, at times, encouraging trade,

But it seems a mistake, to tie one's job market to other countries, without a fallback. (IE Cotton Job Loss)
Cotton needs to be imported (i.e. traded for) if you can't grow it which, fun fact, a lot of places can't.
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#5
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@oromagi
@Discipulus_Didicit
What did people wear before cotton? (Half Joke)

I see sanctions against Russia as reasonable option,
Though sanction sound often double edged sword, that can also hurt oneself.

'Depends though, on convincing enough of world for sanctions to hurt.
If 'other markets exist, sanctions maybe not do too much damage,
Though still value in convincing others to stand against Russian actions, through more than words.

USA sanctions on Cuba, North Korea, made certain, they stayed in arms of USSR, China, I 'think.

. . .

Will Russian oil lacking, lead to more drilling, fracking in USA,
Or to more Green Energy?
#6
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@Lemming
What did people wear before cotton?
Other more expensive non-cotton materials, I assume.
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#7
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@Discipulus_Didicit
So even if cotton can't be grown, 'other materials might be valid options.
And cotton becomes luxury item.

(Below Joke)
"Instead of paying for cable let us watch clouds! Instead of buying clothes, wear but sheets from thine beds! Cut spending to only the bare essentials!" - Randy of South Park

Though it's likely I'm missing vital functions of cotton, such as availability, or being better for swaddling babies or something.
#8
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@Lemming
So even if cotton can't be grown, 'other materials might be valid options.
And cotton becomes luxury item.
Why though? I am genuinely confused.
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#9
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@Discipulus_Didicit
To avoid reliance on other countries.
That they can't threaten sanctions,
Or that if they experience turmoil, you still have your 'own material.

Though if oneself experiences turmoil, trade gains more value,
Though better to just have stockpiles and honeycomb crops, manufacturing for oneself.
#10
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@Lemming
To avoid reliance on other countries.
That they can't threaten sanctions,

The fact that you are admitting "other countries not trading with us would hurt us" is basically you admitting "other countries trading with us helps us" so I feel like you already know why trade is generally beneficial and don't need it explained.

If this reasonable assumption of mine is wrong and you do actually need it explained let me know and I will do so.
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#11
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@Discipulus_Didicit
We don't 'need to trade though,
The stop trading only hurts, 'because we started trading.

For example, let's say you know how to hunt, and how to make clothing,
One day your neighbor says he'll hunt, if you make clothing,
You agree,
But then several generations later, his grandson says he wants double the clothing for half the food he usually trades,
But your grandson doesn't know how to hunt, and either starves to death, or gored to death by a wild boar.

'Sure there's 'some advantages in trade,
A person able to dedicate themself to one craft might be more efficient,
But why bother with the trust fall.

'Better to be sufficient for oneself, and 'limit trade.

'More so for a 'large country, if they've all the requirements, that they 'can provide themselves all they need.
#12
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@Lemming
To avoid reliance on other countries.

It's the division of labour and specialisation. Think about it on a micro level. If you're trying to provide for all your own clothes, food, entertainment etc., you probably just end up with nothing. But if you're in a town and everyone picks something and gets efficient at producing that something, that way you're working towards abundance. 

And it's the same thing with countries. Self sufficiency is poor living. 
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#13
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@badger
Let's say that there is an island, with 10 unlimited resources and 10 people,
So they divide the jobs,
I suppose 10 jobs at once might be difficult,

Then suppose that there are 2 Islands, 10 unlimited resources and 20 people,
So they divide the jobs,
Let's suppose at this point, they are doing the minimum amount of work required for the job.

Then suppose that there are 3 islands, 10 unlimited resources and 30 people,
Would the first 20 people have 'any need to trade with the newest 10 people?

Surely a country could conceivably have enough people and resources, that it doesn't 'need to trade with other countries?
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@Lemming
some nations dont have access to resources
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Surely a country could conceivably have enough people and resources, that it doesn't 'need to trade with other countries?

The country doesn't need to, but the country will be broke if it doesn't. Specialisation is pretty much the entire benefit of trade. 
#16
Discipulus_Didicit
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@Lemming
The stop trading only hurts, 'because we started trading.
Um... No? I'll use your own example in case you don't trust something I come up with on my own. Britian started importing cotton. 

If I live in Britian and I can buy 10 cotton shirts from Atlanta for $10 instead of buying 10 leather shirts from London for $50 that means I have an extra $40 to make my life better with.

In your own example trade made goods cheaper and therefore made people's lives better.
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#17
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@Dr.Franklin
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Only 'true Autarky on Wikipedia, seems to be North Sentinel Island - Wikipedia.

Though I'd imagine the lifestyle is primitive compared to our own, in medicine, technology, resources, luxuries.

As you say, lacking access to those resources on their land, and lacking at all, since they don't trade, that I've heard.

Are all resources 'necessary though?

Still it seems to me that once a certain size of people and resources is reached,
One doesn't 'need to trade.

I don't know that any country 'has that though.
#18
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@Lemming
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On a totally unrelated note, you guys wanna play some Settlers of Catan?
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#19
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@Discipulus_Didicit
No, I trust what you might come up with on your own,
Hm, fair point,

'Still seems bad to become reliant on others,
Though perhaps difficult to 'not be 'bit reliant on others at times.

"Read the book "why the poor stay poor and the rich stay rich. One of the examples in the book explains how america dominated Porto Rico in ris growing because of more industrial big scale farming which was cheaper. This resulted in th unprotected farming in Porto Rico getting destroyed and leaving Porto Rico dependent on American food production. This can happen in all industries. Leading to a country not industrialising and staying poor as a result of free trade." - tahindul

A little bit.
Settlers of Catan 'is a fun game.
#20
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@Lemming
Still it seems to me that once a certain size of people and resources is reached,
One doesn't 'need to trade.

That's because you think things just magically grow on trees tbh. Every product you consume is an industry. It's the same thing as your little town, you want all the knowledge and expertise on that product in one place, not spread out. A country doesn't need to trade with other countries, but it will be poorer if it doesn't. 

I don't know that any country 'has that though.

Countries specialise. 
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@Discipulus_Didicit
I actually really want to play that game but it's midnight here and I am in the horrors. Another time maybe. 
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#22
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@badger
Eh, people who 'own companies get richer, often,
Not 'always workers or country.
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#23
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@Discipulus_Didicit
What will the leather shirt makers in Londen do, now that another country has taken their job?
#24
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@Lemming
What will the leather shirt makers in Londen do, now that another country has taken their job?
Make shirts out of cotton.
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#25
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@Discipulus_Didicit
What will the leather suppliers do?
#26
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@Lemming
Sell leather to industries that need it.
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#27
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@Discipulus_Didicit
Bah,
No one needs the leatherworkers as much anymore.

I get your argument though,
When cars came about, people in horse business complained,
But people transitioned,

I'd have been fine with the leather shirts though.
If I formed a country, trade would be limited,
And focus would be on self sufficiency.
#28
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@Lemming
I'd have been fine with the leather shirts though.
Those still exist, just more expensive than cotton. Go buy some if you want.
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#29
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@Discipulus_Didicit
It's more about accepting one's circumstances, than wanting the cheapest or finest quality goods.

(Edit)
Also self sufficiency.
#30
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@Lemming
Okay, whatever the reason here you go.