Why do economies always have to trade?


Why does every village, city, state, country, and empire need to trade with entities external to itself to be economically viable, survive, and grow, but the Earth itself does not?

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7 Answers

Anonymous 0 Comments

If you trade within yourself with your own resources then you won’t grow,

Apples for oranges, banana for potatoes

But the next villages is trading beef and lamb and coal for fires,

There’s too many options around for you to stagnate to what’s only available to you

Anonymous 0 Comments

Do you really think that as soon as we find an intelligent alien species we aren’t going to immediately try to trade corn for space avocados or whatever?

Anonymous 0 Comments

If your economy can create every resource possibly needed within its borders, and increase production to meet any need just-in-time, then your economy may not need to trade.

But most states (as in nation-states, not US states) can’t do that, they’re either missing a copper mine, or they don’t have enough pastoral land, or construction lumber doesn’t grow in their climate, or the population isn’t big enough to meet their labor needs, etc. Whatever the resource, most countries simply can’t produce everything they need or want without asking a neighbor for a cup of sugar.

Anonymous 0 Comments

Civilizations discovered it is far more efficient to specialize in producing certain commodities/services and purchase life’s necessities from other likewise specialized economies than to try and do everything alone.

In this way, every country does what it is really good at, an everyone benefits.

Anonymous 0 Comments

You don’t have to trade. If you are self-sufficient, you can just make everything you need.

Trade happens when you realize that those people over there have something you want, and you have something they want, and exchanging things peacefully is faster and easier than killing them and taking their stuff.

More people allows for more specialization, which allows for the creation of better stuff. If 99% of the people in your town are farmers, then you don’t have a lot of people left over to be plumbers, bricklayers, chefs, or doctors. Also maybe some of your people are farmers because they have to be, even if they aren’t very good at it. Bob is a sucky farmer, but he’s a great carpenter. Your village is just too small for someone to make a living at being a carpenter. Trade with other villages gives Bob the opportunity to do something he’s good at, which helps everybody. He can fix somebody’s roof in exchange for a bunch of potatoes or something.

The more trade you have, the greater those opportunities are. You can eventually get people who make stupid videos where they play video games, and they actually earn a living doing it! Or you can get people whose only skill appears to be having a huge ass and making a sex tape. And they get rich.

Earth has to be self-sufficient, because we haven’t met anybody from another planet yet. Maybe some day aliens show up, and they’ve figured out how to cure cancer. And we’re like “We would like some of those cancer-curing pills. We see you haven’t figured out celebrity sex tapes yet. Would you like to trade?” And they say “Why do you think we traveled 5000 light years to your planet. Of course we would like some of your celebrity sex tapes.”

And then both planets prosper.

Anonymous 0 Comments

They don’t, however the distribution of resources is a thing that all economies must do (if not the outright definition of an ‘economy’) and trade is a means of doing that. Some might say it being the dominant means of resource distribution is relatively new for humanity, with it largely being reserved for interacting with outgroups and internally things were handed around using social structures.

Also, I believe a lot of your question hinges on what ‘economically viable’ means and you haven’t defined what you mean by that. The explosive GDP growth the modern world is accustomed to, absolutely unsustainable without global trade. Just maintaining a stable population with a flat GDP with little external trade, very doable, we maintained feudalism for a thousand years.

> but the Earth itself does not?

Well for two reasons the Earth is not comparable to a nation state.
– The Earth is not a singular economic entity and likely wont be until the very far future.
– The Earth even in the above scenario is not purely an economic entity, it is a source of resources. Until everything is dug up and available to the economy, it wont reach a point where the Earth economy is just moving resources around and requires external inflows for growth.

If anything we humans trade labour with the Earth to pull out its raw material, if we look at this through a purely trade lens.

Anonymous 0 Comments

There will always be someone that can produce a particular thing cheaper than you can—just because they’re better at it. That also means that you’ll be able to produce something cheaper than everyone else. While you can choose to produce anything and everything yourself, it would be cheaper and more efficient if you stuck with what you’re good at and traded the excess for everything else you need from the people who make those things the cheapest. Hope I helped.