(Drivebycuriosity) - The London Review of Books claims to be the source of intelligent articles, written by smart authors for sophisticated readers. A recent article wakes doubts. John Lancaster wrote an ambitious essay about finance, titled "For Every Winner a Loser" ( lrb.co.uk).
The article is based on Lancaster´s credo: "Every trade has a winner and a loser" (Paragraph 7, sentence 1). Lancaster claims that trade is a zero-sum game, where one participant`s gain is the loss of the other. Lancaster´s claim is based in innumeracy and ignorance of history & economics.
Why should anyone trade, when it leads to a certain loss? My wife and I order often have take out Sashimi (raw fish like sushi, but without the rice). The selection contains a kind of sardine, which tastes a bit sour. This fish is my favorite, but my wife does not like it so much. So we trade. She gives me her sardine in exchange for a fish from my plate. We both are better off.
Bill and Jim are friends. Both are collecting baseball cards. Bill has already 2 cards by New York Mets but none by New York Yankees, Jim has 2 Yankees cards but no Mets. They trade, Bill gives Jim one Mets and receives one Yankees. Both are better off, both win. A long time ago I collected beer coasters. I had 2 Stuttgarter Hofbräu and I traded one of them for a Weihenstephaner. Nobody lost.
Humans have discovered the advantages of trading a long time ago. Maybe some hunters were successful and caught a huge boar, they got more boar meat than they needed. Maybe they traded the surplus boar meat against the steak of a deer which they didn`t have in a long time. They were better off and so were the deer hunters.
The Phoenician culture flourished with the trade of textiles, wood, glass, metals, incense, papyrus, and carved ivory - and their trade partner benefited as well. Venice became a global power by trading rare goods like pepper, which they received from Arabian traders. In the 18th century the English started to export (trade) industrial goods and imported (counter trade) food and other goods.
Today´s global wealth is based on trade. Unfortunately Lancaster is not the only innumerate who does not understand the virtues of trade. Donald Trump started a trade war with China, his successor Biden continued it and made it even worse and now Trump wants to intensive his trade war. Unfortunately the European Union and the UK also are restricting imports.
"Against stupidity the very Gods themselves contend in wane", wrote once the German poet and playwright Friedrich Schiller.
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