When President Trump threatened to impose tariffs on steel and aluminum, it triggered a blizzard of articles for and against the proposal. Instead of parroting what others have said — mostly empirical evidence- I want to give you the tools to understand the issue behind the proposed tariffs: “trade deficits.” Definition To discuss the issue … Continue reading Trade Deficits, An Introduction
Category: Exchange
The most important fundamental activity, after production and consumption, consists of exchange. The process of exchange allows producers to extend the range of their consumption beyond the limits of their own production. Exchange, therefore, benefits all actors engaged in exchanges. When left free and voluntary, the exchange process benefits everyone in what we broadly refer to as markets.
Labor Theory of Value
Source Some people believe that, since all economic goods require some amount of labor to produce, economic goods get their value from the labor required for their production. (even “free” goods require the labor to pick them up off the ground, pluck them off a bush, or capture them with one’s hands,) Formal explanations of … Continue reading Labor Theory of Value
Conflicting Value Theories
Source and Measure of Value For an economic system to operate, market participants must have a consistent and reliable measure of value. They must know the value in order to allocate resources effectively and efficiently. The need for a consistent measure of value holds true regardless of what economic theory you advocate. Although I don’t … Continue reading Conflicting Value Theories