J.C.’s Money Blog

I mentioned that I love to read Robert Kiyosaki articles on Yahoo!, because I hate them so much. On the other hand, I love to read articles by Charles Wheelen articles there, because they are usually pretty good, albeit a little less sensationalist than Bob’s.

He has an article on why limiting free trade in your country isn’t really different than having trade embargos forced on you as punishment.

He argues that trade restriction both creates and destroys jobs, but that the net result is negative for the country. The jobs created are in industries where the country would rather import, and the jobs lost are in the industries where the country would rather export.

When you import, it is because some other market is more effective at producing the goods you want. When you export, it is because your country is more effective at producing the goods than the rest of the world.

In effect then, limiting free trade creates jobs that your country isn’t good at, and in turn destroys jobs in industries your country is great at.

If trade embargos are a punishment, lets not punish ourselves by limiting free tade!