Globalisation, trading, potatoes and tomatoes.

I recently had a rant against anti-globalisation.  I’m not anti, anti-globalisation per-se but I object strongly when the “it’s exploiting people poorer” argument is used.

I’ve got an ‘O’- level in Economics – and here’s my story as to why trading, and globalisation can make us all better off.

There are two countries in the world.  Let’s call them Ireland and France.

Now everyone in France and Ireland needs wine and Guinness.

Each country has a population of 50 who need a pint of wine and a bottle of beer each.

Each country has 100 acres of land.

Now in France it takes 1 acre of land to grow a bottle of wine but, because their weather is so miserably warm and dry, they need two acres to grow a pint.

In Ireland they have such great amounts of rain that they can can grow pint of Guinness on an acre but need two acres for a bottle of wine.

In France they use 50 acres for wine and and 50 acres for Guinness giving them 50 bottles of wine and 25 pints of Guinness.

In Ireland they use 50 acres for wine and and 50 acres for Guinness giving them 25 bottles of wine and 50  pints of Guinness.

That’s just not to go round so they are generally not happy enough.

Then they start to trade.

France grows just wine (100 bottles) and swaps half its wine for Guinness.

Ireland grows just Guinness (100 pints) and swaps half of it for wine.

So guess what – everyone ends up with more wine and Guinness – a global success!