Power of the Market - Balancing Trade

[Mishkafofer]

Remember the BIG scare of the 1980s, about the so called "Japanese Invasion". Japnesse were buying allot of property in US. So what? Japan crashed in 1990's leaving a lot of money in US economy. But during that time US legislators were busy "protecting" the US markets, what for? Japanese pumped money in to American economy, whats wrong with that?

[jrsub3]

People are too concerned w/ Phase 1, however.

People lose a job in an industry like airplanes due to a change in the exchange rate, and people go insane and scream for "government protection". But then jobs open up in another industry. Protectionism just costs everyone their job in the end (see Smoot-Hawley, 1930).

[thomascapital]

Milton warned about the progressives who are now destroying our free markets and therefore our liberties.

[mcbain434444]

IF this is correct then how come the trade deficits with china today are not balancing out.

[regelemihai]

@mcbain434444

Because their currency's value is still very low. The necessary condition he outlines in the clip requires the currency of the country with which you trade to increase in value.

[ajgolfer1]

@mcbain434444 minimum wage in the united states and Chinese labor has gotten 40% more expensive in the past 12 months so give it more time.

[ebeatworld]

that abacus is freakin insane

[TaffyAlpha]

Geeze, these explanations are WAY too simple to be perfect explanations. Milton Friedman also said that trade deficits are okay because that meant that the dollar was strong. WTF?

[DannyBling]

It really pains me to listen to how uneducated some people are. Yes, trade deficits imply the strength of the dollar. Please don't vote in American election, you might actually put this dumb negro back into power.

[TaffyAlpha]

I have open ears to Milton Friedman. Some people however have a tendency to worship the man, or they think what he says is some kind of absolute truth. What exactly makes me unqualified to simply question his ideas? What exactly makes you think he's absolutely right? Questioning the level of their opponents intellect is not how people prove their points in a rational debate.

[n8style]

@DannyBling Please don't reduce the argument to racism, it only reduces your power to convince others.

[davidmesaaz]

There is a difference between how much the government spends and how much the government receives in tax revenues. But as Hong Kong Singapore zero tariff societies have shown its government expenditure and not balance of trade payments that matter.

[evanmcdonnal]

all the right answers are simple. cause effect relationships are simple. it's when governments/fascist people start to alter those relationships that things become complex.

[losheva]

the negative effects of backward areas are greater than the benefits they derive from contact with the developed areas

[losheva]

the mechanisms for capital market increased regional imbalances in development regions in the demand for capital grows, investments are growing, incomes are growing and still investmentsgrowing so the demand for capital , the banking system if not set in a different way, moved the savings from poorer areas to wealthier ones where the demand for capital is higher and higher profitability

[losheva]

Myrdal and Perroux (theory of cumulative imbalances):market mechanisms lead to an imbalance in the use of regional resources, there is a tendency in the capitalist system to concentrate economic activities in areas where the development begins, leaving other areas with a stagnant or decline

[anthonypesce]

Do you believe most men are good and want to help or do you believe most men are evil and want to destroy others. That is the only question you need to answer and you will find your ideology.

[ZebraFeet]

Neither. Humanity is concerned with protecting their own interests. In one instance a man may decide to help someone, in another kill him. It all depends on what decision would advance the individual's self-interest.

[nycistanbul]

Friedman provides simple explanations for lazy brains just the way religions provide simple answers. Markets done it. Magic man done it. A lot of faith in magic.

[MusoSpuso]

The problem with Friedman's assertion here is that the current (and of course when he made this video) system is not a monetary system based on free trade. It is ultimately a government mandated system starting with the Federal Reserve, IMF, WTO and other central banks of the world to prop up the dollar (a "fiat" system) which is ultimately backed by...nothing. Nothing but faith in Big Government. You missed this one Friedman. Love ya otherwise though.

[ludocrat]

Key phrase: "When it is permitted to operate."

The system has been so perverted particularly over the past decade that the free (and legal) operation of trade has been impossible. Consequence: $20-$40 trillion of 'fake growth'. That unwinding is happening now and it is unprecedented in history.

If only Friedman had been around to warn weak governments, dumb borrowers and crooked financiers all. He's recommend the politicians and the crooks be shot, given the scale of the damage they've caused.

[ludocrat]

Us dumb borrowers get to pick up the tab.

[okayillgonow]

Don't forget that what is called "free trade" is more like a modern form of Mercantilism.

[McConsumer]

interesting, but not completely factual