Stuff I Say at School – Part VIII: The Impact of Openness

This is part of the Stuff I Say at School series.

The Assignment

1. Do you feel that a country can thrive in an insular or isolated capacity? Is exchanges needed for a country to be successful? Do you see any examples of countries who have been reluctant to adopt new ideologies or integration?

2. What did we learn from the Columbian exchange that would be applicable to modern day society?

The Stuff I Said

1. While I think a country can thrive to some extent in isolation depending on a number of factors, it will not thrive as much as it could have had it been integrated into a larger exchange network. An extreme historical case is Tasmania: when the island was cut off from the mainland by rising sea levels, the population not only failed to progress, but actually regressed. Anthropologist Joseph Henrich surveyed the archaeological evidence and found that the isolation caused Tasmanians to lose a number of skills and technologies they had once possessed, including bone tools, cold-weather clothing, nets, fishing spears, barbed spears, etc. Even their canoeing skills and technologies worsened. Beyond comparative advantage, trade leads to innovation (what author Matt Ridley calls “ideas having sex”). And it is innovation–technological innovation in particular–that truly transforms standards of living. 

Protectionism and isolationism have had a bit of a global resurgence lately, but these positions fly in the face of the expert consensus as far as economic welfare is concerned (check out the survey data on tariffs at the bottom of the post). This populist backlash to globalization led to a string of recent academic books empirically and philosophically defending economic openness:

2. I’ll rely on Nobel laureate Angus Deaton for the next question:

The historian Ian Morris has described how increased trade around the second century CE merged previously separate disease pools that, since the beginning of agriculture, had evolved in the West, South Asia, and East Asia, “as if they were on different planets.” Catastrophic plagues broke out in China and in the eastern outposts of the Roman Empire. The Columbian exchange after 1492 is an even better-known example. Many historical epidemics started from new trade routes or new conquests.

…Yet globalization also opens its routes to the enemies of disease. We have already seen how the germ theory of disease–a set of ideas and practices developed in the North–spread rapidly to the rest of the world after 1945. Knowledge about drugs to control high blood pressure spread rapidly across the world after 1970, producing…synchronized declines in mortality…That cigarette smoking caused cancer did not have to be rediscovered country by country. While the origins of HIV/AIDS are in dispute, there is no dispute about its rapid spread from one continent to another. The scientific response–the discovery of the virus, the deduction of its means of transmission, and the development of chemotherapy that is transforming the disease from a fatal to a chronic condition–was extraordinarily rapid by historical standards, although hardly rapid enough for the millions who died as they waited. Today’s understanding of the disease, although still incomplete, has underpinned the response–not just in the rich world–and in the worst affected African countries rates of new infection have fallen in the past few years, and life expectancy is beginning to rise again (The Great Escape, pg. 150-151).

From Gregory Mankiw’s Principles of Economics, 7th ed. (pg. 32).

From the IGM Economic Experts Panel, University of Chicago

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