2/14 As he discusses the arithmetic of comparative advantage, he fails to emphasize that it is able to maximize total production only because each side exports the goods and services in which it has a comparative production advantage in order to import those in which it doesn't.

3/14 Comparative advantage, in other words, can only be expressed in the exchange of goods and services, which means that for the world to benefit from comparative advantage, countries should maximize exports in order to pay for imports, not to externalize weak domestic demand.

4/14 There are many reasons to criticize Trump's tariff policies, but it is strange to suggest that they are distorting trade because they push the global trading system away from an expression of global comparative advantage. In fact this hasn't been the case for decades.

5/14 That leads to the second point of confusion. Harford notes that the point of trade isn’t about the stuff you get to sell but about the stuff you get to buy. In the short run, yes, but in the longer run, it depends on how you pay for the stuff you get.

6/14 One way is to produce stuff and exchange it for the stuff you get. The other way is to give up claims on your assets. The former is sustainable. The latter means choosing between producing less (i.e. unemployment) and raising domestic debt. https://www.foreignaffairs.com...

7/14 The point is that the amount any country can invest or consume is a function of the amount it produces, plus or minus changes in debt and assets. That means that the only sustainable way to maximize consumption is by maximizing production, not by maximizing imports.

8/14 Perhaps the biggest confusion is when Harford notes that "robots" (by which he means rising worker productivity) account for a larger share of the decline in US manufacturing employment than "China" (by which he means countries that run manufacturing surpluses).

9/14 He is right, but no economist should treat the two as equivalent. When the number of workers engaged in producing something declines, that is a good thing because it means worker productivity is rising, and increasing worker productivity is... https://carnegieendowment.org/...

10/14 the only sustainable for a country to become better off. It is precisely because of rising worker productivity in the manufacturing sector that so many countries want to expand the role of manufacturing in their economies.

11/14 That is why Germany, China, Japan, Sweden, South Korea, Taiwan, and many other countries have implemented industrial policies designed to increase their shares of global manufacturing. They want to direct as much of their economies as possible... https://carnegieendowment.org/...

12/14 into sectors with the fastest increases in productivity, and they believe that expanding certain types of manufacturing, especially advanced manufacturing, is the best way to maximize overall productivity growth.

13/14 But —obviously enough—that is also the reason why the US should not be eager to accommodate them by retaining a lower share of global manufacturing. We must distinguish between declining manufacturing employment caused by rising productivity, which is a good thing, and...

14/14 declining manufacturing employment caused by accommodating the policies of countries that want to expand their shares of global manufacturing, which is almost certainly a bad thing. To treat the two as equivalent makes little sense.