Chapter 12 Q-7

By reading this chapter Wheelan opens my eyes to the importance of specialization. Specialization is what makes countries productive, richer, and opens up trade. Wheelan also says countries can "consume more by specialization at what they do best and then trading"(274). Wheelan also opens up the idea of how in globalization there will be losers. People in the US will lose jobs because people can do the same thing for cheaper in foreign countries. Although there are losers, in the long run economies grow and absorb displaced workers.

Kiera Ziegler, Chapter 12, Question 2

Trade and tariffs accept my everyday life more then I knew. He uses the example of oranges. In Brazil the conditions are perfect to grow oranges, however the government puts a tariff on them to protect American orange farmers. This makes the price of the orange juices about 30 cents more expensive. Due to this not being a tax on the good we as consumers don't know about this price increase. For me as a consumer I find this frustrating, it causes me to question what others good are more expensive because the government wants to protect industries in the United States. The government isn't forcing them to improve the quality of their products or find cheaper more efficient ways to run their company. This, in the long run, is more detrimental then helpful.

Peter Webster Chapter 12 Q 6

It is interesting how trade is so good for some people, but bad for others. Wheelan says, "Trade makes the most efficient use of the world's scarce resources." Then the next line he says, "Trade creates losers." It is good for everyone because people on opposite sides of the earth get new ideas, better things, and higher quality things. In lower class countries work can be one dollar an hour as opposed to over in the US where the minimum wage is much higher than that. This is good and bad. It's good because the world gets things for a low price, and they can get a lot of things. It is bad because people like the couple at the Levi's plant we saw in class lose their job because they are getting paid 10 times as much as those in poor countries who are doing just as efficient work. Some of those people never get another job, some get better jobs than before. But overall trade is good for everyone.

Angela Scharf, Chapter 12, Q.3

In our lifetime we will have to continue the debate of globalization. People today tend to make a point about buying strictly "American made products" or specifically directing their money to American companies and goods which is fine, but what they fail to realize is that trading with other countries can prove to be just as beneficial if not more. Trading internationally can free up time for the American workers and direct them to jobs that they're better at. The biggest problem with globalization today is that people don't realize that giving jobs to workers in other countries is not a bad thing. These people are only looking at the short run sting of unemployment. Yet they don't realize that in the future the unemployed Americans can be directed to a more fitting job through comparative advantage therefore increasing overall productivity and making the US (and other countries) richer. Although there may be unintended consequences to an interdependent economy, the alternative is Protectionism which only slows economic growth and maximizes opportunity costs.

Julia Carle, Chapter 12, Question #7

After reading chapter twelve, I learned the pros and cons of protectionism and how it can be beneficial in the short run, but in the long run destructive towards the economy. I always wondered before reading this chapter whether foreign trading with countries such as China for goods was a bad way to run things. My thinking was that if all these Americans can buy a Chinese made pack of pencils for $1.00 versus the American made pack for $2.99, the person would most likely choose the Chinese made pack, which means that Chinese goods are more prosperous than American goods, meaning that Americans will lose jobs from lack of factory's prosperity. This concept of protectionism was new to me, but now I realize there really is no good simple solution. If you decide to save American jobs by. Cutting off trade from foreign countries such as China, you run the risk of destroying the economy eventually. And trading a ton with these foreign countries will put many Americans out of work. Before reading this chapter, I didn't quite realize how complex the conflict is.

Zach Du, Chapter 12, Question 6

The part in Chapter 12 which talks about how trade makes us richer really caught my attention. Wheelan uses a fallacy of Abraham Lincoln to start off the topic: "It seems to me that if we buy the tails from England, then we've got the rails and they've got the money. But if we build the rails here, we've got our rails and we've got our money" (273). However, Mr. Lincoln made some flaws in his statements. If I want to buy vegetables from the farmer, then I will pay the money and get my vegetables in return, everybody benefits; whereas, I buy the seed and grow the vegetable by myself, which would takes so much longer to get what I need, even if I keep the money. In conclusion, "We trade with others because it frees up time and resources to do things that we are better at" (274).

Elena Gutierrez, Chapter 12, Question 6

Gunnar Nelson, Chapter 12, Question #6

In chapter 12 of Naked Economics, a particular passage about economics and environmental health struck me as interesting. Before, I would not associate the two notions as being synnonymous. I had the "typical understanding" of a growing Economy requiring the increase in waste. As Wheelan points out that "the very act of staying alive requires that we produce waste." I always thought that the way to boost environmental health would be to stifle industrial production and consumption, which would hurt the economy significantly. However, Wheelan proves me wrong. In the short run, if we produce more, we will pollute more as well. But as we get richer, we will pay more attention to the environment. For an example, Wheelan uses data from London: " the city's current air quality is better than at any time since 1585." This is shocking, who would have guessed... as industrialization continues to increase, so does the care in the environment. I also contend that we as a nation are fortunate to have the ability to even worry about the environment.

Darby Quast, Chapter 12, Question 6

A quote that stood out to me while reading chapter 6 was, "Productivity is what makes us rich.  Specialization is what makes us productive.  Trade allows us to specialize." (275)  I thought that this quote did a really good job of explaining the concepts of absolute advantage and comparative advantage.  When the factors of opportunity cost are not considered, there would be no reason for a country like the United States to trade with Bangladesh.  We can make t shirts just as well, if not better than they can.  Logically the United States would not even bother trading and making them all themselves.  The issue with this is the same people that know how to make t shirts, also know how to create airplanes.  This is why Tiger Woods doesn't do his own auto repairs, and why all of us don't own cows.  By being able to trade and have someone else do these things for us, we are allowed to use our time towards something we are better at and in the end have a more productive outcome.  This is why trade is so important because it increases the wealth and overall improves the quality of life for everyone involved.

Jonathan Webb, Chapter 13, Question 6

  Reading about geography really struck me. How basically 4 medicines were patented, because 9 of the 13 were US studies from Vietnam,  for tropical regions. I would think that that's where the main focus would be going to, tropical regions. But like he mentioned in the book, scientists go where the money is. And that's in developed countries. Thought that was a great idea by he British prime minister to change the insintives of making medicine. and defenitly should be followed by others to improve tropical areas of the world.

Madison Webster, Chapter 12, Question 6

I'm going to focus on the section titled "Trade is based on voluntary exchange." This part struck me as interesting because trade seems so awesome and enriching but it only succeeds if people choose to make is succeed. Wheelan talks about fast food restaurants because often times they succeed anywhere. Even when placed in places that are historic or not in the best condition, they still succeed because people choose to involve themselves with them through work or as a customer. It's crazy to think of the places where these modern restaurants are placed but overall, they make people richer through the jobs they create. We may not always want to see Starbucks sprawled throughout the world, but for people in poorer countries, they love to have work more accessible. Also, most people are willing to work for cheap because something is better than nothing.

Olivia Barr, Question 3, Chapter 12

This chapter left me a bit concerned for the future of the American economy because people are so often misled by logical fallacies that make economic globalization seem a net negative, while in reality it is good for people both within the United States, and abroad. Globalization gets a bad reputation within the eyes of people who do not have a basic understanding of economics, or buy into media slants on the negativity of globalization which only adds fuel to the fire of economic ignorance. If this pattern continues, and finds its way into the platform of a president that is elected, then the American economy could be destroyed within a single term. In short, if people continue to overlook countries like India and China who suffered in closed economies, and have become major world economies in relatively short amounts of time after opening their economic boarders, then the American economy could easily regress beyond the level of the great recession.

Sophie Gunderson, Chapter 12, Question 2

After reading chapter 12 of Naked Economics, I have to admit that I am left a bit angered. Angered by the fact that many people in the world still strongly resist globalization and trade even through the pros have been shown to dramatically outweigh the cons. An example that Charles Wheelan used that was especially interesting and understandable involved the Mississippi River. Restricting trade around the world would be like restricting trade over the river. The people in the east would have to stop what they specialize in in order to make what those in the west do and visa versa. Long story short, it makes no sense and is very unwise to halt this trade. As time goes on and our ecomony, as well as the global economy, increases, trade should continue to increase also! Although there are some losers in the short run and possibly overall, there are many many more winners. I vote more trade and more random KFC's throughout the neighborhoods of the world because without it, we are less specialized, less productive, and less rich. 

Max Hobrough, Chapter12, question 7

In chapter 12 Wheelan discussed trade and how it can turn a one way deal into two way deal with hopefully both parties involved gaining from them. This topic expanded and depended my knowledge for the who world trade system and how it really works. When I got to the part in the chapter when he started to talk about that for something to be and effective trade it needs to be voluntary. A trade just will not work if it is only going to benefit one party and the other party is left unhappy and pissed off. Well from one rotton trade could possibly end a whole trading relationship. Also the whole concept of productivity and doing what you can do the best and most efficient is really interesting. There is always a cost to everything which trading helps with. The trading has groups create what they can create most efficiently so then they can rely on the other trading partner to do the same with whatever it is that is needed. This goes back to human capital and using our resources as best as we can so there can be maximum efficiency and we are not wasting a specific talent or skill set. This system if implemented could have the tools to lift all of Africa out of the dust by other wealthy nations trading products that we can not make. There just needs to be something that the African countries can do better than the rest of the world. I do believe if this can be found they can be raised from the dirt so many issues will then be solved.

Jona Bakke, Chapter 12, Question #6

A specific passage that stuck me as significant and particularly well argued is the point where Wheelan discusses the consequences of protectionism. While trade barriers do provide the immediate benefit of saving domestic jobs, they slow down the economy in the long run. Wheelan states that this happens because protectionism works against specialization. If one country is attempting to be self-sufficient, the people of that nation must perform every job instead of working specifically on what they are good (or least bad) at. Decreased specialization leads to decreased productivity, which leads to decreased overall wealth.

Wheelan also makes the point that in history nations have imposed trade blockades on their enemies in order to isolate them and make them worse off. And so, why would people prevent themselves from development and success by intentionally doing what nations have done to punish their enemies? Although protectionism may seem like a good way to secure jobs in the moment, it can have very negative long term costs, which I think Wheelan argues well.

Maddie Binning, Chapter 12, Question #6

The passage in this reading that struck me as sad and illuminating was the portion that discussed the protest of products created by children in sweatshops. While trying to make a statement of political and moral correctness, protestors contributed to the displacement of child workers to the street, worse jobs, or prostitution. This unfortunate situation shows the importance of informed activism. With the knowledge of opportunity cost, specialization is completely logical. With specialization comes trade and with that outsourcing. The benefits of globalization are fairly evident even if the research is limited. In any case, it just goes to show the importance of understanding economics and fighting for causes that you truly understand to be right.

Miriam Scheel, Chapter 12, Question 6

In this chapter one passage talked about a time Wheelan was the president of the Seminary Townhouse Association. About the same time as he was elected (even though he says that it was more of an appointment than an election) the CTA planned to modify one of their train stations which was close to his neighborhood. The plans were made to improve the accessibility of the trains for people with disabilities, but unfortunately they also would have increased the noise for his neighborhood because the station would have been moved closer. The association tried everything in their power to disrupt these plans even though they meant huge benefits for the disabled people and a smaller disadvantage for the house owners.
This whole situation reminded me of a problem our CFE group heard about in the multiple sclerosis center. Many of the members there had to be in motorized wheelchairs because of MS, and these wheelchairs needed a special transportation vehicle. The members told us that a law was passed that forbid the use of these vehicles after six o'clock; the reason for that was that they were very loud and people felt disrupted. For these people the law meant a little bit more quiet time for the people with multiple sclerosis it meant not to be able to do anything past six, not visit their families or go to concerts. Again one group benefits minimally and another is hurt hugely.
And even though that sounds unjust put in these words, at some point everyone is part of a small group that wants to benefit from the disadvantage of a large group or the other way around. And there isn't one easy answer that will satisfy everyones needs.

Elena Gutierrez, Chapter 13, Question 6

The introduction to this unit was kicked off with reasons why the global mark is growing, and the definition of globalization. Globalization is (put simply) the action that countries take to make their capital available world wide. Currently the global market is growing, because of an increase in globalization. Businesses located in various countries around the globe are opening up to trade with other countries, because of technological advances in communication between countries, and transportation between countries. After learning about globalization, it was nice to read chapter thirteen in Naked Economics, and get an idea of why globalization is so important for countries and their monetary wealth. 

In chapter thirteen Wheelan talks about countries that reach out and trade with other countries, and countries that "economically isolate" themselves. According to a researcher at Harvard Center For International Development, the countries that globalize typically had a 4.5% per capita annual increase. Non-globalizing countries or countries with "closed economies" had a 0.7% per capita annual increase. The difference between the economic growth in closed economies and open economies is surprising, and like my peers I had no idea how important it was for countries to export goods to other countries, and import goods from other counties. 

Rita Hammer, Chapter 12, Question 5

Overall, Wheelan emphasizes the importance of trade and what it does for an economy. Trade allows poor countries to slowly develop and become richer due to the fact that they "have access to markets in the developed world." I was surprised by the statistics he gave about Africa. After there was a law passed allowing countries in Africa to export goods to the United States with minimal tariffs countries such as Madagascar and Nigeria saw increases in exports from 120-1000 percent. Although people end up losing their jobs due to the competition created by trade, it makes the majority better off. Without trade we throw away a significant amount of potential that will contribute to the growth of not just our economy, but several others. It's controversial on whether trade is good or bad for the sake of people and their jobs; however, if everyone had the view of a protectionist we would be forever turning the specialization clock backward. Wheelan brought up the example of forbidding trade across the Mississippi River. By doing so, the majority of people would end up having to make things that they don't specialize in. "We would be denied superior products and forced to do jobs that we're not particularly good at." We can't possibly make enough goods in our country alone to fulfill the lifestyles we all live. If trade is allowing us to produce what we are good at producing, helping us grow as an economy, and satisfying our demand for goods and services then we shouldn't be doing anything other than trading.

Chapter 13 question 6

A driving force for productivity according to Wheelan is human capital. Despite how much human capital a person has their geographic locations can effect how they use their skills and assests. The man in the reading who worked hard built his own house and farmed his own food only made $40 the year of 2012 which was common where he was. Despite his human capital and productivity his geographic location offset any advantages he had. Geographic location can effect all different aspects of life.

Scott Stewart, Chapter 13, Question 6

Good Governance was a key point in this chapter. according to the author a study found that good governance led to economic growth, whereas corruption only stagnated it. In order for 3rd world countries to grow they MUST get rid of corruption wherever they find it. It only discourages foreign investment.
When looking at the world from a practical standpoint this actually makes a lot of sense. I, personally, would never want to invest into an area that has a corrupt government. It would be difficult to get anything done without bribing lots of different people. Because of this it would be too difficult to work in a corrupt environment, and not worth it in the short or long run.

Max Hobrough Chapter 13, Question 6

In this chapter starting on page 461Charles Wheelan brings up the Geographical location of the countries that struggle and how their climate can push a good long term economy away. It was very interesting to hear how he said that tropical weather is meant for vacation and not for long term stay. The idea of this is actually very true, even when I was in the Cayman Islands I could see this happening. The whole economy seemed to be built on tourism a lot like certain areas of Mexico, this economy could be closed up and shut down in one day if those tourists stop coming. This is the issue with these markets, they are set up for temporary sucess because nobody can stay there for a long period of time due to the way that there is not a good medical system. I have also noticed that when ever I go to a popular tourist city I never really ever see medical buildings or hospitals. This raises the issue on the conditions on how people are living, I saw this especially in Mexico. When I was in Capetown, South Africa it actually not just built on tourism but rather it actually had its own industries that could sustain the population of the people. So there needs to be a major investment in healthcare in these towns to make these economies more stable.

Kiera Ziegler Chapter 13, Question 6

 Wheelan listed characteristics characteristic that affect successful economies the one that struck me the most was how little natural resources matter. Many of the most sucessful economies do not have abundant natural resources. In fact some economist say having abundant natural resources may actually be detrimental to the countries economy. If counrty relies on that one resource such as oil for example and if the price drops the economy if brought down and affected. If the one good is doing well then their economy may be sucessful; however if that good is doing poorly so is the economy there.
     I also found it interesting that the government need to be involved but not too involved or restrictive. How is a government supposed to know if they are to involved or too little involved. I believe this is a constant challenge in our country. In general I think we are doing well but there are still disputes on whether the government is too involved with our lives or too little and I doubt  at some point everyone will agree.