Chapter 3

Chapter 3 is titled “interdependence and the gains from trade” and proposes how trade allows each of us to specialize in what we do best, specifically based on comparative and absolute advantages. The video “are we better off if we buy local?” focuses on how much of our products that we “buy local” are actually local and how much they actually benefit our community. The argument is that many of the products used to make something locally are outsourced and typically imported and many of the things purchased from the benefits of this product will not be local. Also because of specialization and that not all jobs are necessary everywhere all the time, if communities were confined to themselves it could make some citizens less productive because they wouldn’t be necessary. The same products we have now may not be available, especially at their current prices. The basic argument is that purchases should be made based on taste to make the economy most efficient, and not where they come from.

I will still make an effort to buy local if the option of what I want is available both locally and elsewhere. Although it may cost me more, it also will benefit my community and people who I relate with everyday. My choice to buy local is based on personal relationships from who I buy my products, as well as because many times I believe they are better and better for me by knowing the exact process that they were made.

The video did not make talk about the jobs that buying local maintains and creates. It is beneficial for a community to have a lower rate of unemployment and by building and supporting local businesses it is allowing this to occur. It also did not discuss that buying local can reduce pollution by cutting down on transportation. The produce is also fresher and does not have any preservatives, which therefore make it better for the consumers health as well.

From a Colorado perspective I do believe that trade with Wyoming is different and better than trade with China because it is still from a partially local region by being a part of the United States. In this sense it is benefiting Americans on a federal rather than state level. We pay taxes for these products which benefit our government, and many of the same benefits of local purchases still hold true, such as health for consumer, lower unemployment, and less pollution.

Overall I think this video makes an interesting argument and relates to comparative and absolute advantages of not buying local because other places may have more need for specific jobs or may have better prices. There is some truth to this argument yet there are other benefits to buying local beyond just the economics of it.