Routes less traded | Huw Edwards | TEDxLoughborough

rich hey we're good I'm fine I'm a commercial economist and my opinion on the other total the title a road

less

traveled was immediately thinking about the ancient trade

routes

that were definitely traveled I think only by the brave but that neverthe

less

probably made certain people make fortunes very large and others almost certainly ended up dead as a result. I'm such a ruthless trade. It's very much a vision, you know, it's exploring a particular vision, I guess, of the global economy and the integration of different economies based on trade now we shouldn't necessarily think of trade as something international or something that countries do with each other, It's more like something that you know everyone does, it's almost like a microcosm of the entire economy, so when you sell your products, your work, whatever and get money that you in turn spend in the stores that are dedicated to commerce is something that allows us to specialize, allows us to develop our own skills and take advantage of the skills of others, it also allows us to take advantage of diversity. of ideas diversity of resources around the world and even in ancient times there were trade

routes

that allowed, for example, Europe to take advantage of silk and spices quite well, since the Chinese obtained in exchange that we must have started somewhere, probably the gold is now

traded

, therefore. it is something that is a human activity rather than something that we should necessarily see as something that governments do or between governments.

In fact, you know, that kind of extreme view will be an obstacle for the government in the way of trade and that is perhaps a view that I will analyze as we go forward today, but in some ways it is unfair because it is known that to develop the support and cooperation is also required, especially when there is greater distance from governments, help is needed in the past needed help in terms of sponsorship to develop trade routes or to carry out explorations and, more recently, in terms of legal support, guarantee that the currency really matters, guarantee that you can really close agreements that are limited to trade with your neighbors.

Relatively little risk, trading further generally involves more and that was perhaps better summarized than on the old maps. I don't know if this was the mappa Mundi, but it shows that there are dragons. I don't think any map actually says this. but that was very worth seeing if you went to distant and remote parts of the world in search of new spices or ever, or gold, there would be dragons that you would like to see you return dead and maps of the world at one time seemed more to talk about the Middle Earth, we know, has gradually changed over time, both as a matter of people investing riskily and also people investing money to develop, obviously, to develop infrastructure, but also to develop relationships and trust between different people. in different countries, the obvious case is 1492 Columbus discovers America, although he didn't do it, there were already people there, what's more, Europeans had also been going there, but they haven't made it generally public, so I don't think it was like that . that the Vikings had been there, perhaps the Welshman Brett, the fishermen returned with large quantities of cod.

Columbus prowled the keys and listened a lot before persuading the Spanish government to allow him to open the trade route, which is what he did and he did it, of course, with the backing of the Spanish government, which gave him all kinds of rights to He and others who followed and supported the Pope, unfortunately did not give many rights to the locals who suffered a lot in the aftermath, but he still brought us potatoes, bought us, brought us tobacco, maybe not so good tomatoes and big band swing , and so a lot of this came up now that the year of globalization really advanced and developed a lot more in the 19th century, but This time it was more about putting infrastructure, so that from 19a to 1873, since you will later write around of the World in 80 Days, is a pretty remarkable book because it couldn't have been written, realistically couldn't have been written four years earlier.

It would have been our science fiction because, in the meantime, we would have the opening of the Suez Canal, we would have the Union Pacific Railroad's transpacific extension of freight routes; in theory, in 1873 it was possible to go around the world in 80 days today you could probably do it in much less than that, certainly there was a pause in globalization really between the two wars, if you like, almost a kind of anti-globalization movement in the form of nationalism within all the major countries, obviously you have Communism on the rise, fascism, countries like Great Britain were showing more and more imperial preference and trade, actually stagnant, retreated substantially, so from 1946 onwards the Western powers really determined that this would not happen again and there was a very conscious effort in ways to establish create institutions to encourage the major Western countries to at least start trading more with each other, so we got the ghats that became the WTO.

Various types of Europeans agree that it is obvious and they will do it, the IMF Bank will have a financial system to support it and so on from this period. We actually got very rapid growth in World Trade, six percent annually, which is much faster than the growth of the world economy as a whole. It's probably been the main driver now that many of the developing countries initially responded by trying to opt out, I mean. in a way, copying in a certain sense the interwar nationalist agenda, they sought a path of development as, of course, the Soviet bloc was doing, they tried to isolate themselves and, in reality, as time went by, part of what has kept this The snowball of trade is that the countries that did this learned one by one that it just doesn't work, so the Berlin Wall fell in China with the Communist Party in control, they actually reversed many of their policies and didn't They have looked back.

India and Latin America. In reality, the United States, despite having politically right-wing governments, would have been very opposed to trade and again in the 80s they had to open themselves up to bankruptcy, which is why we see this rapid growth in world trade, which in reality it finally plateaued in 2008 with the great trade recession, but now it's growing again, so that's really a picture that we live in a world of globalization and a lot of people would say that this is like the second great era of globalization, the first It was before the First World War and in this era of globalization things are changing very quickly, you know, we are definitely aware that we are buying things with much more global brands, where you can see these big cargo ships coming mainly from China , but also from Bangladesh, etc., who bring goods and, in the same way, there are technological goods, etc. going in the other direction now obviously has a huge impact on all the economies gained and the impact is perhaps measured in terms of price, if you go down now after the end of the multi fiber deal about a decade ago, now go down to Primark and you can buy a pair of jeans for a fiver Primark of course is an Irish company, you may not know that the jeans were probably made in Bangladesh or Africa of course it has other consequences particularly with the speed of change as you can see in leicestershire .

Unfortunately it is full of abandoned factories, although unemployment rates haven't risen that much I suppose because people have been redistributed, but there is certainly pressure on some people's wages, but the alternatives to doing this would be to pay a lot more than 5 Many earn many times more pounds repairing jeans than the wages of these workers would have to cheat Bangladeshi levels, which is particularly attractive, so in some ways we shouldn't be so surprised that we are globalized because, in general, The evidence that people who participate in global markets do much better than those who do not distance themselves, of course imposes a cost, but nevertheless we can see that the cost of not being globalized will be enormous, we will pay more for many goods and In addition, the costs of developing new technologies will be enormous.

Can you imagine what it will cost to develop the smartphone independently? In each of the many countries, you can do it and when it comes to environmental policy, we talk about harming the environment when it comes to the environment. You simply couldn't imagine low carbon technologies being developed at the level of small isolated nation states, so if you go to the meetings of the policy makers, the movers and shakers of the people who meet once a year in Davos, um, they wouldn't. They wouldn't really ask why we are so globalized. They would wonder why we are not more globalized.

They will say that we have seen enormous benefits and many of these people would say that the benefits have actually occurred. many people are coming out of poverty, the proportion of the world's population living in poverty is decreasing, you know, it has possibly given us technologies that are now allowing us to address environmental problems, so why hasn't it happened more and is there something Backing this up from the commercial economist we now have a kind of rule of thumb, it started as an empirical model, in fact it started as a physics magnate, so we were looking at the gravitational attraction between different planets and actually the same rule It applies in terms of trade between two countries or even between individuals and companies within countries the larger it is the more likely you are to trade, the further apart the less likely you are to trade, it is actually quite robust if you double the distance between two countries that keep everything else in the same trade. halves and that's actually very useful, it seems like it's a very strong rule that applies within countries, trade between regions, etc., so you get this decrease over time at its lowest distance and that makes sense because, after all, you know that trading costs more. long distances and that is probably the main explanation why we don't buy all our products from China;

However, there is a big exception to this when it comes to national borders, even now I know, I mean we are past the age of economic nationalism, even now we are in a time where trade is decreasing, you know, every time that the distance doubles until it reaches a national border, but then there is a sudden fifty percent drop and then the decline resumes and it is that drop that in some sense is what is obsessing policymakers and perhaps obsessing the people who advise them, we can observe it, we can see that you know the speaker between some countries and others and it can be affected by politics, so for example, we know that our tariffs are reduced, there is some drop. in this, but tariffs cannot explain all the difference, in all quotas and voluntary export restrictions they can, and so policymakers and their advisors are looking for how we can explain how we explain this difference.

In fact, you can open these economies more and you see things like efficiency queues at border posts, etc., yes, they are important and then you get into things like regulatory differences and it starts to get complicated and also currencies, etc. get complicated because, in some ways, they are starting to look at areas that we have traditionally seen as the prerogative of national governments and this started in some ways with the European single market, we started to get into the prerogative of national governments. things like regulation etc, and saying hey, we need to make these things more compatible so that we're not actually preventing people from trading because it's hampering supply chains etc, it's raising people's costs, so you've had attempts at standardization, you've had the single currency, you've had attempts with T Tip, etc., you now know, for example, that many national purchases, such as the National Health Service, are open to legal challenges potentially by part of companies, but are we really? we're really capable and we miss measuring things here and well, here's an example comparing car sales in Germany and France, these are two countries that have effectively eliminated, they've eliminated all regulatory barriers, there are no tariffs and then they use the same currency, there is none on board. there are very low border posts between them, but you still have a strong border effect in Germany.

VW gives the same size of the badges. VW outsells Renault approximately six to one in Britain or Switzerland, it's approximately three two one, but in laughter, sir, it's the other way around. around VW depleted cells two to one and as I say, I don't think there's anything obvious policy-wise, he explains it to necessarily say that we have to keep playing with policy and we know that we have to overwrite more and more. of national rules and regulations and border controls, etc., may be premature, we may not do it,They won't actually make that much of a difference as we think there's something else going on, so maybe some of these more controversial issues are actually quite dangerous, maybe they'll actually threaten us with some sort of backlash as they'll possibly We are now seeing the euro against Europe, which in a way could be getting the baby out of the bathwater because the trade that continues and the liberalization that has been carried out I think it is almost undeniable that we have brought very big and I think the rule is that we are actually being too impatient.

I think we have forgotten the old days of exchanges. There are dragons. We forget that you actually know. Trading is always risky when dealing with someone new, even if the maps are already written you still have to go and find out who the people are and what products. Are they trustworthy to work with? How do you shake their hand and need to develop? You know the relationships with them and in the same way, when people start buying products again, you know that they will stick to things that are safe unless they see a strong reason to change and then they start to develop new hobbies, two new patterns of suppliers, things in economics generally take much longer than we think and the best thing was summed up for me by a check economist, a young check economist who was speaking English and his check neighbor and a check neighbor asked the English why your grass is so much greener than mine, then the Englishman hands over the lawnmower and says, cut it.

My check comes back and says, well, yes, but it's not like yours, so the Englishman says, we'll do it. I will know it every day for the next 300 years and that is the message. I think the patients appreciate it.