Comments on: A “Tired” Argument…

By: Lil’ Posner Says International Law Has No Independent Worth « The View From LL2

Wed, 23 Sep 2009 19:04:46 +0000

[...] provides an organized means of implementing the reciprocity principles of game theory (something Susan talked about earlier) while trying to avoid problems of escalation or sanction resistance. In an optimal [...]

By: Susan Simpson

Susan Simpson — Sat, 19 Sep 2009 18:46:49 +0000

To be fair, I don’t think he meant international trade in general was zero sum. … But what exactly it was he did mean was pretty incomprehensible. I’d never heard of the dude before, and glancing at his books now, it looks as if he’s got a carousel of Asian countries, and every few years or so he plucks out a new one to serve as the foil to his protectionist theories…

On a side note, I was actually feeling a bit uneasy about quoting out parts of the article. I feel a little like I was taking stuff out of context, but I really don’t think there’s a way around that while keeping the articles blog-length appropriate.

p.s., to anyone out there trying to read the article: you don’t actually need to sign up with FN. Just copy and paste the headline and plug it into google, and it’ll give you the full text of the article. (I also think you can just replace the “false” in the URL with “true”, maybe? But I know the first way definitely works.)

By: Michael Williams

Michael Williams — Sat, 19 Sep 2009 18:34:42 +0000

One more thing: you're right that international trade is not a zero-sum game. Maybe Prestowitz should read Sowell's Basic Economics:

International trade is not a zero-sum contest between nations, but a wide array of voluntary transactions between individuals living in different countries, who must all gain if these transactions are to continue. International trade is just one more way of getting more output from scarce resources which have alternative uses.

By: Michael Williams

Michael Williams — Sat, 19 Sep 2009 18:29:39 +0000

Prestowitz has been singing this song for years now, originally making the same anti-trade arguments about Japan. His arguments about game theory are also flawed. Tit for tat is only an optimal strategy in a two-player scenario if each side perfectly interprets the other. Otherwise, you might end up with neverending escalation when one side's actions are misperceived. There is a huge risk of misperception in the trade context because many interest groups (e.g., domestic tire producers) purposefully skew the 'perceptions' in order to achieve the best results for themselves.