Once up the time, three societies began to emerge in the different locations on the planet. I am going to call them West, Tropicana and Aglaia.
In West there were reasonably good natural resources. The climate was temperate and the people quite industrious and independent. In West there had been an allocation of the society's resources on the basis of each indidividual's efforts. Some of the people worked for others, and were paid of their services. Some became quite wealthy, and others poor. But the society made everyone contribute some of what they produced to assist those unable to work. No one in West had ever ventured beyond its ocean borders.
South of West several hundred of miles lay Tropicana, a large island nation stretching across the middle of the planet. It had many natural resources, more than West. The climate was extremely hot. Most of the population was involved with small scale agriculture. A few persons had accumulated considerable wealth, but Tropicana was mainly a poor island where more people worked hard to survive. There was much disease in Tropicana, far more than in West. Families, rather then leaders of the society, tended to provide for those who were unable to provide for themselves. But there were more poor than in West. As in the case of West, no person in Tropicana had ventured beyond the island.
To the east of West, on the third major land mass, was Aglaia. The climate and amount of natural resources were similar to West, but the society's distribution of resources and ownership of property was very different than in either West or Tropicana. In Aglaia, everything was owned collectively by the group. Each person was entitled to receive what was needed to live, and each was expected to produce according to his or her maximum capacity. The mass of the population existed with adequate food, housing and medical care, with on one having very much more than anyone else. But the government elite seemed to live quite well. Aglaians were as little travelled as Westerns and Tropicanos; none had ever ventured beyond Aglaia.
As the people of West became more affluent, they had time to devote to activities other than providing for necessities. Culture and thought occupied the time of a number of Westerns. New ideas of exploration caused small delegations to be sent across the oceans in search of what lay beyond. When a group of Westerns arrived in Tropicana, they were surprised to discover a population living in much less affluence than in West.
Tropicanos were very interested in the better quality garments and farm instruments possessed by the Westerns. They asked if they might obtain some of them. It took Tropicana five days to make a garment, but the same garment of better quality could be made in West on something Westerns called looms in only a half day. At first the Westerns offered to give the Tropicanos some garments; both people were quite friendly towards each other. The Tropicanos accepted several, but said they would like to be able to obtain many more for their people. West would have to increase its production of garments to satisfy the demand of Tropicana. If they did that they would have to stop producing something else. So they talked to Tropicanos. The Tropicanos said that although the tools of the West were very useful in design and quality, the metal was very soft and they discovered that Western tools did not last long. The Westerns agreed that was a problem with their tools. The Tropicanos showed the Westerns some of the minerals found in many places on their island in great abundance. One mineral was very hard and after some experimentation the Westerns learned that they could add it to their metal and make very strong tools. So the Westerns had found something to receive in exchange for their garments. They would take so many kilos of the Tropicana mineral for each garment. And so the nations began to trade. West received something it did not have and Tropicana received something it had not been able to produce as well as West.
Labor costs of production might have equalized in the two societies, but people of West were reluctant to move to Tropicana, and Tropicanos generally felt the same about moving to West. Furthermore, each nation had placed limits on immigration. This had a tendency to preserve labor differentials in the production of goods.
Later the two societies discover that Tropicana made a wonderful wine, and they did it with much less labor than the wine produced in West. It took West ten days to produce a barrel, while Tropicana could do the same in two days. It seemed appropriate for West to trade some of its garments for Tropicana wine. West had a "comparative advantage" in producing garments, Tropicana in producing wine. And so they traded more. And they began to to discover that West produced some other items more efficiently than Tropicana, while the latter produced nearly as many goods more efficiently than West.
One of the items which West produced more efficiently was dishes. The firing kilns were very advanced in West. There was also a dish industry in Tropicana. It was owned by relatives of some of the leaders. The dish producers said that if Tropicana imported dishes from West, the Tropicana producers would go out of business. They also said that now that the two countries traded, the Tropicana dish producer would learn how to make better dishes and soon would be able to compete with the Westerns dish producers. So the Tropicana leaders said to the West, "We will not allow your dishes to come into our country because we must protect our infant dish industry." The Western dish producers were not happy. Nor were the leaders of West. They said the two societies should trade all goods with no restrictions. They referred to this as free trade. But the Tropicanos pointed out that the Westerns would not allow Tropicana boats to be sold in West. West official responded by saying that unlike the dishes, boats were necessary for survival of West and it must protect that special industry. Westerns asked Tropicana when it thought the infant dish industry would mature, and be able to compete with West. Tropicana thought it would take ten years and suggested that until that time no Westerns dishes would be imported. When Westerns pointed out that their dishes were finer in quality than the Tropicana's, the leaders of Tropica suggested that some would be allowed in, but that they would establish a quota of so many thousand per year. Some critics in Tropica suggested that would allow the government elites of Tropica access to the finer dish. But after thinking more about the idea, Tropica decided that it could raise some needed revenue by placing a tax on imported dishes. They also learned that when news of quotas reached West, various Western dish producers began arguing for guotas allocations. So Tropica discarded the idea of quotas and placed a tariff of four pellos on each Western dish. They estimated that the same number would entered by paying tariff as would have with the quota, but that using a tariff would raise revenue. The revenue was needed because the nation was trying to build roads and ports to help its trade. But it seemed to be buying more goods from West than Westerns were buying from Tropica. Westerns debated whether it ought to retaliate against these new tariffs, but it did not. Its leaders wished to pursue free trade. It seemed inevitable, however, that trade would not really be free, but that officials from these countries would create various regulations to limit trade when limitations were believed to be in the best interests of their nation.
To be continued.
No comments:
Post a Comment