Zero - Sum game anyone?

I continue with the topics of trade and politics. It is always an interesting one from the economic perspective because trade benefits society, but you would never know it talking to politicians or voters. Why do voters support policies that clearly slow the economic growth of the nation? Why do politicians gain big political points when the talk of restricting trade? Because most voters believe the rhetoric and do not understand the benefits of trade. The starting point is the understanding that economic transactions are not zero-sum games. A zero-sum game is one in which their is a winner and a loser. Think football; at the end of every game one team leaves as a winner, the other as a loser. Economic transactions are not the same. By their very nature economic transactions ensure that both parties leave as winners. This is because you (and the other party) will only enter into a transaction if you feel it will leave you better off than you were before. Think about the last time you bought milk at the local convenience store, chances are both you and the cashier said thank you at the end of the transaction. You wanted the milk more than the money and the cashier wanted the money more than the milk - you both benefit. So my first conclusion is that trade benefits both parties involved. I will address third parties (who sometimes lose as a result of trade) in later segments.

The big question involving the current political climate is what will happen with current trade policy. McCain supports free trade. Obama is a question mark. His campaign rhetoric has been anti-trade (opposition to NAFTA), but you may remember his economic adviser Austan Goolsbee secretly telling Canadian officials to ignore the anti-NAFTA tirade; saying it was merely campaign positioning. By the way, both of Obama's economic advisers unapologetic open market, free trade supporters (as are nearly all economists). This is an interesting story (Tariff to Nowhere) about the current state of politics and trade. Roger Lowenstein makes the case that in spite of perceptions, trade with China may actually be a bigger benefit to those at the lower end of the income scale - even though this income group traditionally is the most opposed to trade deals.