So.... would you sit at this table.

[college kid]

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I can promise you that for every two people who are percieved to be both profiting from a given transaction, there are others somewhere else in the world that are paying the price for this to be possible.

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That is absolutely not true. It is possible for such a win win situation to occur simply because we have preferences which can be translated into dollars.

Let's say you and I both like baseball, in particular one player. I really like Player A and you really like Player B. We also like collecting baseball cards. Now I see a card for Player B and think that it's a decent value, even though I am not as big of a fan for Player B. So I buy it and am moderately happy with my purchase--I think I got a deal even though I don't really love the card.

You find the same situation for Player A. Then later we meet and see that each of us has a card which the other would really enjoy, instead of moderately enjoy. We swap, and each of us thinks we got a great deal because we enjoy our new card much more than the previous one. The seller is happy--he sold his cards. And we are both happy.

At every point along the way, the happiness/profit level for every person in this scenario increased without taking away from somebody else.

This is what economics is about. Very often, situations can be improved to the benefit of everybody involved without detracting in any way from anybody else. And when this is not the case, the times that the deals do hurt others do not necessarily "make up" for the times they don't. It's not a zero sum type of deal. There is an overall positive expectation from making these kinds of transactions.

[xniNja]

I'm only replying to this because you totally ignored what that guy was saying. His point acknowledged the "perfect" transaction between you and your friend. You ignored the crux of his argument; the other people in the world who suffered from the trade.

Baseball cards are a weak example, the scenario you created was a perfect one in which both of you ended up with cards of the player you wanted- with no other criteria by which to judge the value of the cards. This doesn't attack the thesis whatsoever.

Here's a relevant analogy: You go to the store to buy a sweatshirt. The sweatshirt sells for $40. You value the sweatshirt more than the $40 and the store owner values the $40 more than the sweatshirt. Win-Win? Not exactly, here's why.

The "other people" the poster above is talking about are the store employees, perhaps more significantly the sweatshop workers in other countries that have no real choice in the transaction and anyone else who may somehow be affected by the deal.

While it could be true that the 2 cents per hour they make, they value above their time and effort- in reality it's a forced scenario in which the worker has no choice or basis to make a value judgment.

I want to throw away my bachelor's in Econ. when people talk about Free trade being win-win.

[college kid]

[ QUOTE ]
I'm only replying to this because you totally ignored what that guy was saying. His point acknowledged the "perfect" transaction between you and your friend. You ignored the crux of his argument; the other people in the world who suffered from the trade.

Baseball cards are a weak example, the scenario you created was a perfect one in which both of you ended up with cards of the player you wanted- with no other criteria by which to judge the value of the cards. This doesn't attack the thesis whatsoever.

Here's a relevant analogy: You go to the store to buy a sweatshirt. The sweatshirt sells for $40. You value the sweatshirt more than the $40 and the store owner values the $40 more than the sweatshirt. Win-Win? Not exactly, here's why.

The "other people" the poster above is talking about are the store employees, perhaps more significantly the sweatshop workers in other countries that have no real choice in the transaction and anyone else who may somehow be affected by the deal.

While it could be true that the 2 cents per hour they make, they value above their time and effort- in reality it's a forced scenario in which the worker has no choice or basis to make a value judgment.

I want to throw away my bachelor's in Econ. when people talk about Free trade being win-win.

[/ QUOTE ]


I'm venturing away from my area of knowledge here, and you obviously, with your degree, have more of an idea of what you're talking about but...

Though sweatshop conditions and the employees may dislike what they do--would they do it if the cons outweighed the pros. Though pennies an hour may be small pay, it's better than nothing, and although the would be better off if they had dollars per hour pay, pennies is still more than nothing. It may be a sickening scenario and we think they "lose" from the transaction--but the alternative of starving is worse, isn't it?

How exactly have they lost?? It may be a bad situation to begin with and still bad after the transaction, but it is better than not having the work.

Please help me understand where I am wrong; I am very interested in this and you seem more than qualified to help. Thanks. (I am serious and not being sarcastic, just FYI.)

[SNOWBALL138]

zero sum just means that to the extent that one party gains, the other loses. The zero refers to the sum of these gains/losses. I gain 5 dollars by paying you 5 dollars less. You lose 5 dollar by being paid 5 dollars less. Negative five plus positive five equals zero. In the example given above, it can clearly be seen that the retail store owner, the manufacturer of the clothes, and perhaps the consumer gain from the low wages of people working in sweatshops.

Zero sum doesn't mean that one party has zero gain. Clearly, even the lowest paying most demeaning job may be preferable to starvation.

[xniNja]

This lies more along the lines of my opinion and philosophical/political views than a concrete example from Economic theory, but I'll attempt to explain in this way:

The slave-wage labor we speak of, may or may not, be worse than the "alternative," death. More importantly, death is not the only alternative, but simply one of two forced choices given the slave-laborer by the rest of society. The worker, therefore, has no choice or basis to make that value judgment. This means that he is unable to weight death, against 2 cents an hour, against fishing instead, or rebelling against society altogether.

If we want to go back to Econ. at this point, the post above did a good job of explaining why this interaction (between the worker, consumer, employer, and society) is in fact, in a sense, a zero sum game. (The + + that the consumer and employer gain is at the expense of the others.)

I'm not sure how else to explain the principle, let me know if you have further questions?

[revots33]

Posts like this always remind me of the "Executive Game" episode of the Sopranos, where Tony's buddy, a degenerate gambler, begged his way into the big executive poker game. After trying to talk him out of playing, Tony eventually gave in, and of course his friend lost all his money. At the end Tony S. defended himself by saying, "A grown man made a wager. He lost. He made another one. He lost again. End of story."

I tend to agree. I'm just playing a game to the best of my ability, as I would expect anyone else to do against me. I feel bad for the other guy, but there are a lot of factors that made him a degenerate gambler, none of which I had anything to do with.

If the situation was reversed, and any one of us sat down at a table with our last 100K, good luck finding someone unwilling to take your money.

[cwes]

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I want to throw away my bachelor's in Econ. when people talk about Free trade being win-win.

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You should know better than them. Use your degree to teach them to take a closer look.

International trade theory states that there are gains from free trade. This is supported by empirical studies.
These gains can lead to win-win situations if distributed in such a way. It is often assumed that all participants profit from free trade, the participants here being countries.

It does in no way state that every single individual is a winner of free trade.

So please do not put that degree in the shredder, that might be -EV. [img]/images/graemlins/wink.gif[/img]

[xniNja]

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So please do not put that degree in the shredder, that might be -EV. [img]/images/graemlins/wink.gif[/img]

[/ QUOTE ]

Hah. Yea, that's what people keep telling me. I plan to keep it around; I'm going to law school now, but I swear all I do is play poker on-line and in the B&M.

I just meant that as more of a frustrated comment about Free Trade and the common perception that it is in fact win-win for all parties concerned (countries, individuals).