Free Trade and War

A recent report says that U.S. nuclear weapons are more stable than expected. They are obviously high quality weapons. So why doesn’t the U.S. use its comparative advantage in the production of nuclear weapons and export them? To Iran, for example. Iran is busy building nuclear weapons at inflated prices and inferior quality. Iran, in return, could sell oil to the U.S.

The answer is obvious. But what is not at all obvious, at least to me, is where do you draw the line when exporting technology? What analytic tools do we have that allow us to determine where the line should be drawn?

War has always been with us. As Martin van Creveld says,

War, i.e. politically-organized armed conflict, is part of human nature; recent observations have even confirmed the existence of something very like it among chimpanzees. Therefore it is almost certainly going to be with us as long as humanity itself lasts.

(Source here)

Is the relative decline of the U.S. computer industry, for example, something that the U.S. government should be concerned about (more here)?

In 2005 the U.S. trade deficit in information and communications products was $83.2 billion. The deficit with China alone was $50.8 billion, reflecting the huge off-shoring of IT production that has taken place.

With regard to jobs, there has also been a clear contraction in the level of U.S. IT employment. In 1999 there were 4.9 million technology-related jobs, but this had fallen to 4.6 million in May 2005 – a loss of 300,000 jobs. The bulk of these job losses were for workers earning less than $30,000 per year, but there was also significant job loss of 140,000 among computer programmers who made an average of $67,400 per year.

(Source here)

Is this a problem? Should the government intervene? If so, how?


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