Reasons Not To Vote Tory No. 3,670

Economic illiteracy over trade perhaps?

"I don’t want to leave the European Union and I\’ll tell you why. This is a trading nation. Yorkshire relies on traded goods and on businesses which can trade all over the world and particularly in Europe. We export more per head of the population than America, Japan or other countries. We are a trading nation and Europe is a very important market for us. If we are not in the European Union, we would not be able to have a say over what the rules of the single market are. That is the primary reason for being a member of the European Union."

He\’s committing the mercantilist fallacy, that exports are either the point of trade or that they make us rich. No, it is imports that make us rich, exports being merely the shite we ship abroad to pay for them. We don\’t actually care what the rules of the single market are, as long as we can buy what we wish from there. However, we do care very much about the fact that membership of that single market means that we are not allowed to buy what we wish from other countries around the world….something which makes us poorer.

Don\’t they teach economics at Eton? There\’s clearly not enough of it in a PPE from Oxford, anyway.

21 comments on “Reasons Not To Vote Tory No. 3,670

  1. He also says if we were not in the EU we would not have any say over what the rules were.

    Does he actually think we have any say now?

    If he does, I have a bridge he might be interested in viewing…

  2. “Don’t they teach economics at Eton? There’s clearly not enough of it in a PPE from Oxford, anyway.” As you may know, you can do the PPE degree with just one term of Economics in it. Mind you, that should be enough to let you get the gist of it.

  3. “He’s committing the mercantilist fallacy, that exports are either the point of trade or that they make us rich”

    OK. Let’s forget trading nations and look at individuals.

    It’s not being paid for work (exports) that makes us rich but all the stuff we buy (imports).

    How rich do you think you (or any trading nation) be with loads of stuff (imports) bought on tick without a job (exports) to pay for ’em?

    Methinks it’s you that guilty of fallacious thinking.

    Tim adds: “How rich do you think you (or any trading nation) be with loads of stuff (imports)” Very rich indeed actually. Getting stuff without having to work for it?

    “bought on tick without a job (exports) to pay for ’em?” Quite, as I say, exports are only the boring shite we do to get the imports which are what make us rich.

  4. While I can see what you are saying is pretty obviously true, what’s the alternative. Who else do you suggest we vote for?

    If we’re honest and pragmatic for a moment, and we consider the next election, there are only three possible outcomes.

    A Conservative govt
    a Labour govt
    a hung parliament

    No-one I know thinks a hung parliament is any good for the country, although god knows less harm would be done by one than a Labour govt!

    No-one posting sensible comments here wants another Labour govt.

    So we have to vote conservative…

    DC seems to be more anti-cannabis than GB, which is weird and I disagree with him vehemently, and will let the conservative party know that my vote for them does not mean I support all of their policies.

    However as I just posted over at DK, where he’s complaining about Boris trying to do something about drunken yobs – The Conservative party is the least bad option, in exactly the same way as democracy is the least bad form of govt. Each has many problems but they are the best options we have which have any chance of happening..

    Z.

    Tim adds: Well, you should vote for me, of course, and by implication thus vote for UKIP.

  5. “the imports which are what make us rich.”

    Again, nonsense.

    You are being deliberately obtuse. It’s income (exports) that make us rich and spending that depletes that wealth.

    But, I guess this is merely a manifestation of your aim to make every post a pro-UKIP propaganda statement.

    Boring.

    Tim adds: No, it’s a manifestation of my trying to bang a bit of Adam Smith in to people. A longer explanation here:

    http://www.globalisation.eu/blog/trade/confusion-on-the-benefits-of-trade-200803231317/

  6. Nobody is claiming that it is solely “exports [are what make] us rich”.

    It’s your assertion that imports (spending) that do so that is the sophism.

    Imports – or any spending – are the manifestation of wealth not its driver.

    And a self-referential link merely underlines your obtuseness.

    Tim adds: No, it’s the getting the goods and services cheaper than we can make them ourselves is what makes us rich. That’s why we buy them, see?

    Or Bryan Caplan:
    http://www.econlib.org/LIBRARY/Columns/y2003/CaplanBastiat.html

    They assert that democratic competition effectively drives politicians to do what the people want, but to their collective misfortune, many popular beliefs about economics are systematically mistaken. Sophisms—like “Exports make us rich, imports make us poor”—are widespread.

  7. GeoffH,

    Mate, although I’m on your side in this argument, I’m afraid I’ve had this conversation with Tim often enough to be able to tell you that you’re wasting your breath.

    FWIW, I’m also a member of UKIP – the party’s a broad church, although I might be described as being on its far left.

  8. BTW, Geoff, hat they on’t seem to teach in economics classes is economic history. The theory is great – pretty it’s been isproven so often.

  9. Voting for UKIP might make sense IF they had any chance of gaining some MPs. They don’t – so any vote for them, or DK’s wonderful sounding Libertarian party is a wasted vote and means Labour are more likely to gain another term, which I think we all agree is the worst possible outcome…

  10. I know, Martin, it’s like flogging a dead horse.

    Again, Tim, you’re adding additional words to the original argument – not to elucidate but to try and turn my argument into one that I never made.

    I’ve no quarrel with the Adam Smith idea that getting”goods and services cheaper than we can make them ourselves” is what make us rich – provided we have the means to pay for them .

    You originally, I suspect now understand and regret, claimed that imports alone make us rich. No qualifications, no ifs or buts.

    What’s more “exports are only the boring shite”. Well, maybe so but what’s ‘boring shite’ when we do it must mean, for example, that China does even more ‘boring shite’. So much so, that we must be importing a lot of ‘boring shite’.

    As far as I am aware, exchanging shite for shite merely leaves us all deep in shite. And isn’t iguano from South America the only internationally traded shite?

    I suggest in future when you wish to have a dig at Cameron you frame your opening argument a little more precisely. Then you won’t be forced to defend a nonsensical position.

    Of course, you’re free to believe that all the trading in metals never made you rich but buying Portugese Pizzas (?) did.

    I doubt there’ll be many joining you on that particular oddball planet.

    Tim adds: “Of course, you’re free to believe that all the trading in metals never made you rich but buying Portugese Pizzas (?) did.”

    Quite, the consumption of pizzas that I didn’t have to make myself, ie, pizzas that are cheaper to me than making them myself, is exactly what makes me rich(er, given that I am not in fact rich, only richer than I was without trade).

  11. I’m not informed enough to really debate it but, whilst I take your point that, counter to conventional wisdom, imports are the “good” and exports are the “bad”, it does seem to me that they are opposite sides of the same coin. We can’t have one without the other so both are necessary and to be encouraged. The key is that trade is what makes us richer, either because we have more money or more things to play with.

  12. I’ve no quarrel with the Adam Smith idea that getting”goods and services cheaper than we can make them ourselves” is what make us rich – provided we have the means to pay for them .
    Hmmm. That sounds suspiciously like what Tim said originally
    is imports that make us rich, exports being merely the shite we ship abroad to pay for them. We don’t actually care what the rules of the single market are, as long as we can buy what we wish from there
    although perhaps less pithy.

    Methinks GeoffH is confusing turnover with profit here. Your exports are your turnover, i.e what you make from your sales.
    It is what you have left after you finish buying stuff that is your profit. Keeping your costs as low as possible by buying cheaper imports of course gives you a bigger profit.
    No one goes into business for a high turnover, only for profit.

    Although Geoff since you believe that
    Imports – or any spending – are the manifestation of wealth not its driver.
    Well.. what can I say? So many holes there, so little time. I mean come on, Any spending? Really? What if you’re spending borrowed money? Choosing a cheaper import is in fact often a manifestation of how little you had to begin with. Why do you think I shop at Primark!?

    Again, Tim, you’re adding additional words to the original argument – not to elucidate but to try and turn my argument into one that I never made.
    A superb defence in a live debate where people would have forgotten what was said originally, not best used in situations like this where passers-by like myself can read through the entire discussion and see quite clearly that Tim has done nothing of the sort!

    (and to think people call me stupid!)

  13. Tim, still making the same basic error, I see. And you have another blinkered one in support. Not surprising that he (she) goes under the Harman soubriquet.

    Unfortunately for you HHH, the original argument IS there for all to see and it claims: “No, it is imports that make us rich, exports being merely the shite we ship abroad to pay for them”

    No qualification about imports being cheaper than we can make them for ourselves.

    But still, if you want to believe that
    imports – spending – is what MAKES you rich rather what what you can CHOOSE to do BECAUSE you are rich then there’s every generation of bankrupt out there to agree with you. I doubt your bank manager will, though.

  14. I fear GeoffH and Tim are arguing at cross-purposes here; they’re both right in a sense. To see why, forget countries and think about individuals. My income comes from exporting economic writing – it leaves my house. So Geoff’s right – it’s exports that make me rich.
    But how can I devote so much time to high-income export activity? It’s only because I can import. If I had to grow my own food, I’d have to devote hours to my small-holding. But in fact I can import food from Waitrose, freeing up these hours for higher-income activities. In this sense, Tim’s right – imports make us rich, by saving us time which we can use to specialise in what we’re least bad at.

    Tim adds: Very much the expanded argument I use at that globalisation institute post which was, sadly, rejected by Geoff as being simply self referential. And as is also said on this thread, of course no one buys imports which are more expensive than local (or home) production. Something which Smith again pointed out. As long as exchange is voluntary, then people would not make that exchange.

  15. Layman terms, you work (export your labour) and in exchange you get paid (import cash), you then (export the cash to) pay for goods and services. The difference between your imported cash and exported cash is your profit/loss, the goods and services are your wealth or the bit that makes you rich.
    Is this correct so far ?

  16. No qualification about imports being cheaper than we can make them for ourselves.

    Yes GeoffH, that is because the qualification is not necessary. Anyone who is buying more expensive imports where the local alternative is cheaper is in need of medication, not an economics lesson.

    The problem is that mercantilists force others to buy relatively expensive local produce, it has NEVER been that free traders encouraged the purchase of relatively expensive imports.

    Oh and Chris,
    My income comes from exporting economic writing – it leaves my house. So Geoff’s right – it’s exports that make me rich.
    Not really. Remember the difference between turnover and profit.
    If you earnt £1 million but your fixed costs were £1.5 million, you would NOT be rich.
    You count your wealth after expenditure, not before. That confusion is one of the main reasons why businesses go under!

  17. zorro,

    “Voting for UKIP might make sense IF they had any chance of gaining some MPs.”

    You’ll never get anything changed with that attitude. Vote Conservative/Labour and all you’ll do is entrench their positions.

    Voting sends a message of what you want. If UKIP had won a lot more seats at the local elections, the Conservatives would have sat up and taken notice, and the eurosceptic voices would have been taken more notice of.

    Please don’t believe that Cameron is going to do anything in a hurry to change anything. He’s living in the same wishful thinking la-la land of many backbenchers in the Labour party. He backs bullshit like Corporate Social Responsibility, legislating over choccy bars at tills, and will absolutely refuse to grasp the nettle over anything.

  18. Let’s imagine that a resource-rich country prevents the import of, oh, let’s say, for argument’s sake, alcohol. So the fortunate custodians of said resources earn a pretty penny exporting their mineral wealth. But (in theory at least) they can’t use that money to buy that most delightful of substances, alcohol. Are they richer than their neighbours in Dubai, who export the same mineral wealth, but can buy alcohol?

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