[extropy-chat] 'Unskilled jobs to go in 10 years'

[Adrian Tymes]

--- Hal Finney <hal at finney.org> wrote:
> To approach it, I think of the simplest possible
> case: one person.
> He is isolated and works only for himself, making
> all his own goods.
> Now we introduce another person, a poorer person,
> and allow them to trade.
> Can this trade make the first person become poorer
> than he was?
> 
> I don't think it can, because every trade he makes
> is done because, from
> his perspective, he gets more for the trade than he
> gives.  Therefore
> each trade increases his net wealth.  If a trade
> would make him poorer,
> he wouldn't make it.  He'd just continue to make his
> own goods instead.
> 
> Now, does this generalize to two nations?  I'm not
> sure; generalizations
> from individuals to large groups are often erroneous
> in economics.
> But broadly speaking, if we look at each individual
> trade between the
> nations as being on net beneficial to both sides,
> then I think trade
> can only make both of them wealthier than if no
> trade were possible.

The problem is that a nation is not just one person.
Let's say you have two people, one of whom gets 2
coins for a unit of wheat, and the other of whom
consumes wheat at a certain rate.  Now introduce a
third person, who can provide a unit of wheat for only
one coin.  Trading with the less expensive wheat
producer increases the wheat consumer's wealth by one
coin per unit of wheat, and the less expensive wheat
producer's wealth by the same - but it decreases the
more expensive wheat producer's wealth by two coins
per unit of wheat that would have been consumed.

However, the more expensive wheat producer is now
free to do something else - like, say, refine the
one-coin-per-unit wheat into bread worth at least
three coins per unit, which might not have been
profitable using two-coin-per-unit wheat but might be
profitable using one-coin-per-unit wheat.  The
wheat consumer has an extra coin per unit wheat
lying around, some of which can go to purchase bread
instead.  *That* is how wealth is created.  Trade just
sets up conditions where this can happen, although it
can often be so important that it gets all the credit.