Vision - November/December 2007 - (Page 6)

The ecoNomisT analyzing future trends] • [ by shawn g. dubravac, cfa I It’s a Wonderful Life “By globally defining markets, prices move lower and selection increases.” love the holidays because it means Mr. Potter wanted full control of what the one of the all-time great movies citizens of Bedford Falls had access to. soon will be popping up everyIf even limited trading can be so advanwhere. It’s a Wonderful Life stars tageous in the small town of Bedford Falls, James Stewart as George then why not on a much grander scale? George’s experience running Bailey who runs a small, but important Savings and Loan bank in the the Savings and Loan is not dissimifictional town of Bedford Falls. lar to worldwide trade. A major scene in the movie unfolds with the S&L filled by an Global Trade angry crowd of clients—formed Just like open access improved in anticipation of withdraw- Shawn G. DuBravac the lives of those in Bedford Falls, ing all of their deposits held by the S&L. global trade is improving our lives today. As one neighbor, Charlie, demands all of Of course, we must be on guard against his deposits, George responds with: “but the Mr. Potters of the 21st Century. As in you…you…you’re thinking of this place the town of Bedford Falls, there are those all wrong. As if I had the money back in a lurking in the shadows—hoping they can safe. The money’s not here. Your money’s in frustrate working American consumers for Joe’s house (pointing to one of the men in shameless self-gain. Trade doesn’t benefit every individual, the crowd) right next to yours. And in the Kennedy house, and Mrs. Macklin’s house, but it does afford big benefits for most and a hundred others. Why, you’re lending people. What protectionists—like Mr. Potter— them the money to build.” George rightfully saw the series of trans- fail to acknowledge is the sheer number of actions made by the Savings and Loan as trades these protectionists make each day. welfare enhancing. While there were risks, It is barely noon as I write this and already most parties were made better off by the I have made the following trades: transactions. Of course, the cantankerous 1) Electricity from Dominion Virginia Mr. Potter hated the transactions George Power (Richmond, Virginia) Bailey facilitated through his S&L. These 2) Assorted clothing from Lands’ End, transactions made him worse off because Perry Ellis, and Allen Edmonds (Dodgeville, Wisconsin, Dominican Republic, Growth in Charitable Giving ($ Billions) Miami, Florida, Vietnam and Port Washington, Wisconsin) 3) Cereal from Kel$260 b logg’s (Battle Creek, Michigan) 4) Assorted dishware from Crate and Barrel (Naperville, Illinois, Portugal and China) $124 b 5) News from the Wall Street Journal $72 b (New York, NY) $29 b 6) Transportation from the Washington Metropolitan Area Tran1975 1995 1985 2005 sit Authority (WashingGiving USA FoundationTM / Giving USA 2006 ton, DC) November/December 2007 For each of these transactions, there surely were thousands more that went into getting the product or service to a point where someone could then trade it to me. The Wall Street Journal for example is likely printed somewhere around Washington, DC, on paper made from Canadian lumber with ink from India. Many of the contributing writers are spread around the globe. Does it matter some of these trades occur across county lines, state lines or international date lines? If the protectionists’ claim that trade is bad is true, then why not oppose all trade? Why do they only selectively discriminate against trade with people of a different race, who speak a different language or live in a different country? The logical fallacy of protectionism is the amount of trade involved each time these charlatans put their views in print or stand before a CNN camera. Trade truly makes for a wonderful world. It ensures we get the things we need and want at prices we can afford. In order to enable countries to focus on what they do best we must enlarge markets—making them globally defined—so economies of scale can do their magic. By globally defining markets, prices move lower and selection increases. Lower prices implicitly make us richer. And with this increased wealth we are empowered to improve the lives around us. As the graph illustrates, charitable giving continues to grow in the U.S. and global trade surely deserves some of the credit. But I suppose protectionists should be against charitable giving as well—since it too, is a trade. In the end, trade will benefit all who embrace it. Trade ensures not only a wonderful life for us, but empowers us to make a wonderful life for those around us. Let us not allow the Mr. Potters of the world to fear monger their way into this wonderful life. • www.ce.org 6 http://www.ce.org

Table of Contents Feed for the Digital Edition of Vision - November/December 2007

Vision - November/December 2007 Contents Shapiro's Spectrum In This Issue The Economist C4 Visionary Tech Speak Going Global Eye on Business Tech Policy Special Supplement: CES Unveiled 2008 CES Technologies to Watch Eastern Europe Embraces CE M&A Fest Displaying the Future CEA Newsline Market Insider Just the Stats

Vision - November/December 2007

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