Let nations trade

Font Size

Print

Feedback

Email

Discuss

: leaving others unemployed and impoverished.

The argument being made is as follows: just as the essentiality of trade among individuals for their survival is not in doubt, similarly the potential and wide ranging therapeutic effect of international trade on nations should not invite scepticism.

Just as trade among individuals cannot lift everybody of poverty — otherwise India would never have seen 50% of her population living below the poverty line in 1972, trade among countries might not make all countries rich and with good reason. Such inability does not imply that we point our guns at ‘globalisation’ per se; instead it is essential to ensure that the mentioned hand maidens do their job. Trade is a harbinger of development but only when the hand maidens stop sulking and start delivering.

The following example, in the form of a fable, might cure doubting Thomases of some of their scepticism about the benefits of trade among communities/nations:

In the valley of flowers everything else has stopped growing. The human inhabitants, on the verge of starvation, have given up all hope when in walk a bunch of explorers from a neighbouring land laden with food, drink and other provisions. They are quite taken by the wild flowers of different hues and are ready to pay for these in terms of food and drink, which in any case they have in surplus. The flowers they buy enrich their lives; at the same time, inter-community trade saves the inhabitants of the flowering valley from starvation.

This fable, with a Bollywood type saccharine ring to it, nevertheless is both illustrative and representative of the huge potential benefits that might flow from trade — gains that have been exploited by South Korea, then China and finally India and Vietnam to grow and escape from the poverty trap. This is not to say that international trade will be the saviour under all circumstances. As pointed out earlier, the presence of opportunities for trade among individuals, though essential for their survival, is often not sufficient; it is then foolish to expect international trade to have all the answers. Just like poor individuals, poor countries may remain so because they have nothing to offer the rest of the world.