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Debate:Does "free trade" increase wealth rather than simply redistribute it? (view source)
Revision as of 23:56, March 13, 2007
, 23:56, March 13, 2007no edit summary
I think when you notice economies in communist nations where they don't have free trade, you have a higher poverty rate. Communism tries to control prices and control the market, as opposed to free trade when the invisible hand is moved by supply and demand and not some government. However; I would say, that it also depends on the tax rate and interest rate on how wealth is increased. During the JFK years, the wealthy had a 87% tax rate, and wealth had not increased much even if the market was free in the USA. If the government has high taxes on the wealthy, the wealthy are less likely to invest it or spend it, which distributes wealth to the middle-class and poor in the form of jobs, dividends, and buying from small companies so they can employ more people. It is the banks that increase the wealth, because they give out loans and keep 10% of the money deposited in their vaults, which creates the wealth. If the wealthy aren't able to put their wealth into banks, because they are highly taxed, then wealth does not increase. --[[User:Orion Blastar|Orion Blastar]] 23:19, 9 March 2007 (EST)
I think when you notice economies in communist nations where they don't have free trade, you have a higher poverty rate. Communism tries to control prices and control the market, as opposed to free trade when the invisible hand is moved by supply and demand and not some government. However; I would say, that it also depends on the tax rate and interest rate on how wealth is increased. During the JFK years, the wealthy had a 87% tax rate, and wealth had not increased much even if the market was free in the USA. If the government has high taxes on the wealthy, the wealthy are less likely to invest it or spend it, which distributes wealth to the middle-class and poor in the form of jobs, dividends, and buying from small companies so they can employ more people. It is the banks that increase the wealth, because they give out loans and keep 10% of the money deposited in their vaults, which creates the wealth. If the wealthy aren't able to put their wealth into banks, because they are highly taxed, then wealth does not increase. --[[User:Orion Blastar|Orion Blastar]] 23:19, 9 March 2007 (EST)
All voluntary transactions create value. It's not a zero sum game. In many cases that value can be converted to wealth through the productive use of the assets being traded. For example, let's say that I agree to sell you my old lawn mower for $20. The fact that I am willing to sell it for $20 means it is worth <i>less than $20</i> to me (or else why would I sell it at that price>). That you are willing to buy it means it is worth <i>more than $20</i> to you (or else why part with your $20?). Perhaps you'd have been willing to pay $30, or $40. For productive assets, the value you ascribe to it will be at least equal to the present value of the cash flows that asset will generate. Free trade allows assets to more easily make their way to the highest valued use because it removes barriers that might otherwise have prevented the transfer. By funneling assets to their highest values use creates more wealth (obviously) than funneling them less highly values uses.
--[[User:JesusSaves|JesusSaves]] 19:56, 13 March 2007 (EDT)
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