Aid to Russia

James Devine jdevine at popmail.lmu.edu
Fri Sep 4 10:54:38 PDT 1998



>Brad De Long wrote:
>> Trade with which of the following generates more surplus for the U.S.?
>>
>> (a) South Korea or (b) Vietnam
>>
>> (a) France or (b) Nigeria
>>
>> (a) West Germany or (b) Pakistan

In addition to Mat's totally valid comments, I have a couple:

what is meant by "surplus" here? This word has many meanings in economics, maybe even more than "capital." (If we're going to use jargon, please it rigorously.)

is it the balance of trade surplus? Isn't one of the basic lessons of international trade theory that the B/T surplus of one country with another is pretty irrelevant? same thing goes for the balance on the current account, right?

Is US foreign policy driven by which countries provide the largest balance of trade surplus (or current account surplus)?

or are you talking about consumer surplus? producer surplus (scarcity rents)?

or do you mean surplus as in "profits + interest + rent" (i.e., surplus value)? In that case, the focus should be on _cui bono_, who benefits? We should think about which corporations make the most profit off of which countries and how influential these corporations are with policy-makers in DC.

Jim Devine jdevine at popmail.lmu.edu & http://clawww.lmu.edu/Departments/ECON/jdevine.html



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