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Subject:
From:
[log in to unmask] (Harry Pollard)
Date:
Tue Dec 5 09:12:32 2006
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James Ahiakpor properly says that the classical writers were well  
aware that trade is between individuals even though they wrote of  
trade between countries.  
  
I'm not entirely sure that modern economic writers appreciate the  
difference as they mostly discuss and certainly measure  
aggregates.  
  
The classical assumption that 'Man seeks to satisfy his desires  
with the least exertion' seems to cover the various examples  
given by Smith and Ricardo. People try to behave in a manner  
likely to provide them with the greatest advantage. This covers  
all the comparative advantage examples and, as you say, does not  
require either full employment (whatever that may be) or a trade  
balance.  
  
However, I would say that all trades balance.  
  
If I trade my book for your chair, at the moment of exchange the  
value of the book is a chair. The value of the chair is a book.  
There is no imbalance, How does this change if I trade 100  
automobiles for a shipload of lamb chops?  
  
The important aspect of the trade is that the traders obtain an  
absolute advantage by trading. Otherwise they wouldn't trade.  
  
In other words I rather like Medaille's "self-regulating,  
self-adjusting utopia that required no intervention by the  
government or any other social institution" even though he might  
not.  
  
Harry Pollard  
  

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