xkcd Explains Trade and Tariffs
Trade (and Tariffs)
In this comic, xkcd humorously illustrates the complexities of trade and tariffs, using its signature stick-figure style to break down economic concepts in a simple, visual way. The comic links to related xkcd works, including a temperature timeline, and playfully suggests viewing the site with outdated technology for the full experience.
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- dvh
Alt text: "You legs may have a comparative advantage at running, but we arms have a competitive advantage at swinging hammers, so unless you accept that we're the dominant limbs and stop hogging the oxygen, that running advantage won't be around for long."
- ot
Reference to Aesop's fable?
- smallmancontrov
A current account deficit is a capital account surplus. Persistent deficits shift the balance between Asset vs Export sectors, dumping the export sector and pumping the asset sector. Put differently, we can pay for imports with shit that we make or shit that we own -- and this has implications for people in our country who make shit vs own shit.
A better analogy for the trade deficit would be sitting on the couch slamming potato chips and observing the shift in our body away from muscles and towards fatty tissue. Should we be excited to see this example of specialization in action? Is it wrong to want to fix our diet and push our body composition in the opposite direction?
https://yalebooks.yale.edu/book/9780300261448/trade-wars-are...
- phony-account
To make the analogy even more perfect, the character should be holding a saw rather than a hammer.
- kemayo
The context here is that president Trump has an interesting view of trade deficits / surpluses. Specifically, he frequently cites cases where the US has a trade deficit with another country -- where the US is spending more in that country than that country is in the US -- as if that country is "taking money" from the US.
This is a bit peculiar, because it ignores the whole "the money we are spending is being exchanged for goods that come back to the US" part of the trade. I.e. it's not a problem that I have a "trade deficit" with the grocery store, because I have my groceries.
https://finance.yahoo.com/economy/policy/articles/trump-brag...
- zahlman
If tariffs are so obviously and universally bad, then why do tariffed countries respond with retaliatory tariffs instead of letting the first country shoot themselves in the foot and getting on with their own business?
- thunderbong
Mobile version
- DoctorOetker
this ignores evolution theory: the cells in the leg, arm, brain, etc. share the exact same genome variation, so selection pressure rewards coherent action in the interest of the individual organism.
thats not true for different players in some level-or-not playing field