So let’s say that you love persimmons, and that I happen to grow the consistently best you’ve ever eaten, and at a great price to boot.
And let’s say that you make uber-good cinnamon rolls for a living. And let’s say that I’m on a perpetual diet; the last thing on Earth I’m ever going to eat is a cinnamon roll, even one as delectable as yours.
So now, as you wade through all manner of stickiness, while slaving in front of a hot oven day in and day out to produce a pastry that so many unconstrained eaters would die for, would the fact that I’ll likely never be your customer keep you from purchasing my persimmons?
Of course the answer is no! You couldn’t care in the least what I eat, in fact you can barely keep up with the current demand for your cinnamon rolls as it is. But even if business was slow, it wouldn’t occur to you that I should buy your cinnamon rolls just because you buy my persimmons. In fact, if you demand that I buy your cinnamon rolls or you’ll cease buying my persimmons, well, you just lost access to my persimmons; remember, I don’t eat cinnamon rolls.
Again, and of course, you don’t care what I do with the money you buy my persimmons with. But if you did, it wouldn’t take you long to figure out that you’re in great shape (not a physical reference by the way, assuming you enjoy your own cooking) nonetheless. For, as it turns out, one of your regular customers (who, not that it matters, is allergic to persimmons) happens to produce some of the best oatmeal around (not that it matters, by the way, but you can’t stand oatmeal). And you can bet your bottom dollar that a health conscious bloke like me loves his oatmeal: You buy persimmons from me (even though I’ll never buy cinnamon rolls from you), I buy oatmeal from her (even though she’ll never buy a persimmon from me), she buys cinnamon rolls from you (even though you’ll never buy oatmeal from her). Voilà!
I’m thinking that I ought to be able to stop here, and that the reader ought to be completely disabused of whatever faulty notion he or she may have been harboring about trade. But, just in case, I’ll continue.
Sure,
- the cinnamon roll maker has a trade deficit with persimmon grower,
- while the persimmon grower has a trade deficit with the oatmeal maker,
and
- the oatmeal maker has a trade deficit with the cinnamon roll maker.
However (not that it matters),
- the cinnamon roll maker has a trade surplus with the oatmeal maker,
- while the persimmon grower has a trade surplus with the cinnamon roll maker,
and
- the oatmeal maker has a trade surplus with the persimmon grower.
And of course nobody cares! They just do business with one another and, best of all, they live in utter peace: I mean, who would purposely hurt their customer, or their supplier!
Oh, and by the way, notice how I identify the producers (who also happen to be consumers) — the actual parties to the transactions — as who they are, as opposed to where they live. Meaning, in my story, as in real life, East Side does not do business with West Side — persimmon growers, cinnamon roll bakers and oatmeal makers do business among themselves!
No losers among the transactors! None! Whatsoever! Never! Ever!
Jeff Jacoby’s excellent article (HT Don Boudreaux) inspired that last paragraph…