Re:US Announces Withdraw From Postal Treaty
by notfromhere on Thursday October 18, 2018 @10:57AM
(#18248823)
In reality though, Iowa has more than enough corn farmers for the population, and plenty of low-wage manufacturing workers to create said farm machinery there. Especially when the Swiss Franc/USD are 1:1, the Swiss would just open a plant there and finance it
Re:US Announces Withdraw From Postal Treaty
by zanny on Thursday October 18, 2018 @04:06PM
(#18251679)
At least in the theoretical example it depends on whether its more economical to build the machines closer to the farms in exchange for sacrificing farmland to do so.
Even if the world isn't so cut and dry to turn all of Iowa into one giant corn farm if Iowa is the best place to grow corn than corn production should naturally trend there, pushing internal business out that can operate elsewhere while subsuming corn production elsewhere where its less profitable.
That kind of effect is very minute on the actual day to day operating economy and decision making process of business entities involved which is why we don't just see all of Iowa turned into a corn farm, but those kind of effects have positive efficiency influence over long time frames.
There is probably no advantage to making machines in Switzerland that you couldn't duplicate in Iowa, but because Iowa has the natural advantage in corn it is better for everybody if Iowa concentrates on growing the best corn (hopefully this includes improving their soils to grow even better corn), while the people of Switzerland concentrate on making better machines. Then they trade machines for corn and everybody is better off. If instead everybody was a jack of all trades there would be less corn because the people of Iowa aren't as focused, and the machines the Swiss produce wouldn't be as good because they don't get as much practice making them.
Of course the above is simplistic. Iowa has machinists that make fine machines, and there are Swiss farmers who grow some fine corn.