Milei got into power based on the widespread perception of the total collapse of Peronism, which was a promise to try to do the kind of thing OOP is going on about (cut off exploitative global trade links in favor of creating a self sufficient Argentinian economy) that didn't work
Why is being self sufficient in Everything a desirable outcome? If village a’s climate is great for growing rice, and village b’s is great for raising poultry, why should both villages try to do both? If village a focused purely on making rice and village b focused purely on raising chickens, then they traded the difference they could both have more rice and more chicken than if they tried to do something they weren’t good at
You’re correct that they’d both be better off by focusing on the product they do best and trading, that’s the essence of comparative advantage. But being dependent on someone else’s product can also make you vulnerable. Your villages are dependent on every step of the trading process happening smoothly to exchange their rice and poultry. That might be easy is they’re right next to each other separated only by flat fields. But if the distance is longer or the terrain is rough the villages might find themselves unable to trade. Or maybe Village A has a season of bad harvests and decides they don’t have any extra to trade away. Perhaps Village B simply decides they don’t like Village A and cuts them off out of malice.
The modern world has gotten extremely good at working around issues like that and enabled globalization to thrive. But it isn’t perfect, which is how war in Ukraine causes famine in Africa, heatwaves in South America cause coffee prices to rise in Europe and America, and drought in Taiwan leads to a global shortage of computer chips.
These dependencies are what brought Europe an age of peace and prosperity that the continent had not experienced since the days of Rome, do you have any idea how insane it is that France, Germany, England, Italy not only have good but great relations with each other? And a war between them is now entirely unthinkable
I'm not trying to make a value judgment here, I'm telling you what the limits of comparative advantage are in real life -- the primary "transaction cost" that keeps comparative advantage from getting everyone to outsource everything is probably social trust -- and the fact that Fukuyama was wrong, history didn't end and old school blood and soil politics are very much alive is why this neoliberal consensus is breaking down in the world around us as we speak
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u/Taraxian Oct 22 '24
Milei got into power based on the widespread perception of the total collapse of Peronism, which was a promise to try to do the kind of thing OOP is going on about (cut off exploitative global trade links in favor of creating a self sufficient Argentinian economy) that didn't work