Trade

Trade, like labor productivity, logically belongs to the subject of production and cost, and it is presented separately because it is a specialized area that requires fairly lengthy treatment.

Throughout this section the environment is not taken into consideration, and the population level is assumed to be fixed.

ENL makes no assumption about the geographical scope of analysis. The analyst can treat the whole world as a single geographical unit, in which case trade is logically impossible.

Alternatively, the chosen geographical scope can be a set of countries, an individual country, or a defined area that does not take account of national boundaries, such as a bioregion. In these cases, trade can occur between the chosen geographical unit and the rest of the world.

The term "region" refers to any geographical unit below the global level.

Trade occurs when an output is produced in one region and consumed in another. The region that is being analyzed is called the local region, and all other regions are called remote regions.

When production is local and consumption is remote, this is an export with respect to the local region. When production is remote and consumption is local, this is an import with respect to the local region.

Contents of this section:

Coercive Trade Relations In our consideration of lumber exports we assume that the lumber cannot be used to increase local health because all associated final outputs are at their target quantities. In the real world, this is not necessarily the case. Read on…
Exports—What to Do with Potatoes? Consideration of exports is symmetrical to the case for imports. Suppose we're in Idaho, and we're wondering what to do with all the potatoes that can be grown in our fertile soils. More generally, the question before us is this: when should an output be consumed locally, and when should it be exported? Read on…
Imports—Where to Get Potatoes? ENL's theoretical rationale for trade is established, but it is too abstract to handle specifics. What the framework also requires are analytical tools for answering concrete trade questions. Read on…
Local Self Sufficiency Based on ENL's approach to trade, those who favor local self-sufficiency are correct in some cases, but not in others. Read on…
Rationale for Trade The consequences of trade do not by themselves establish the rationale for trade. To do this we have to understand that trade is in essence a form of production. Read on…
Results of Trade An isolated region is usually called a closed economy, and by avoiding trade it is practicing what standard economics calls autarky. Given the inputs available to it, such an economy can produce a specific range of final outputs, incurring specific local input costs. Read on…
Transportation is Part of Production Transportation, which plays a central role in trade because of its ecological impact, is treated by ENL as an element of production, not distribution. Read on…
Unique Aspects of Trade Trade is a distinct topic within ENL primarily because the separation of production and consumption results in the separation of cost and value. Read on…
Why Consider Trade? What needs to be established first is why a region that follows ENL’s principles would consider trading at all. Why not just produce and consume locally? Read on…

<prev linear thread next>


Unless otherwise stated, the content of this page is licensed under Creative Commons Attribution-NonCommercial-NoDerivs 3.0 License