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162 points TaurenHunter | 2 comments | | HN request time: 0.492s | source
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forgotoldacc ◴[] No.43580069[source]
A long time ago, Britain was the dominant economic power in the world.

Britain had a massive trade deficit with India. It imported far more from India than it exported to India.

But what Britain did was import massive amounts from India and made high value goods at home and provided high value services that couldn't be provided elsewhere.

Should it have flipped the other way? In 1800, should Britain have suddenly shifted gears and started massively exporting to India in order to balance the trade?

Sure, India was a colony and not a mere trading partner, so no need to argue about that. But the US is also an empire that has bases around the world and has many countries in an economic chokehold. The situation is similar in a modern context since official colonization is kind of gone. The US takes in lower value products from around the world and sells them back to the original country at a higher price due to some sort of added value.

Should America do the opposite? Should we drop all of our high value scientific and medical research, drop our engineering, and go all in on making t-shirts to balance the trade deficit? Because we very well could do this. We could steal away the fine industry of Cambodia and Bangladesh and have them buy all our t-shirts and balance the deficit pretty quickly. But is that a long term benefit?

Cambodia and Bangladesh are countries that can't really afford to buy massive amounts of American high tech exports or foods. But they're essentially colonies that export goods to other countries, and through accumulating wealth through that development, more people can afford to buy American high tech products. But we're demanding that these countries buy lots of American products now with money that they don't have. The only way to balance that is to make things they can afford. Which means low value items.

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InDubioProRubio ◴[] No.43580179[source]
>high value goods at home and provided high value services that couldn't be provided elsewhere.

Eh, they were swiftly outcompeted in almost all fields, but protected that system of mercantilism, by disallowing their colonies to unload anything that was not flagged british. Monopolies work that way, they ruin things and are memorized in the empire center as "good times"..

https://www.investopedia.com/ask/answers/041615/how-did-merc...

PS: This is one of the reasons why the spinwheel is on indias flag- as a sign of clothing production autonomy.

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1. debottam_kundu ◴[] No.43580235[source]
The wheel on the Indian flag is not a spinwheel[1], though it was proposed at some point in time before they got independence.

[1]https://en.wikipedia.org/wiki/Ashoka_Chakra

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2. dudefeliciano ◴[] No.43580338[source]
Thanks for pointing that out. I knew this already, but if I didn't that would be exactly the kind of factoid that would stay stuck in my head for the next 30 years