That Doesn’t Work Anymore

Chapter 31 Measure of Trade

International trade should allow the world to be efficient and provide more and better things to people. However, it does not always work that way because trade causes domestic disruptions and that pulls politics and policy into the equation. If Canadians can buy Spanish wine that is cheaper and better than their wine, people with capital invested in the Canadian wine industry will not be happy. This may lead to the Canadian wine industry complaining to politicians that then get involved and trade then becomes quite complicated, even though it should not be. Tariffs and quotas might get imposed and you could imagine that in this hypothetical example an entire sub-industry evolves that uses capital to keep trade barriers ...