INDEPENDENCE, INTERDEPENDENCE
INDEPENDENCE,
INTERDEPENDENCE, AND DEPENDENCE!
The concepts of independence, interdependence, and dependence help to ex- plain world trade patterns and countries' trade policies. They form a continuum, with independence at one extreme, dependence on the other, and
interdependence somewhere in the middle. There are no countries located at
either extreme of this continuum; however, some tend to be closer to one
extreme than the other.
Independence
In a situation of independence, a country would have no reliance on others for any g00ds, services, or technologies. Since all countries engage in trade, however, no country has complete economic independence from other countries, and all thus have at least some access to goods and services produced in a foreign country. The most recent instance of economic near-independence was seen in the Tasaday tribe, found by hunters on the island of Mindanao in the southern Philippines in 1971. Although some scientists have called the Tasadays a hoax, many others believe that the tribe may indeed
have been the last group on earth to live in virtual isolation. A less extreme example is Albania, which experienced near-isolation from the end of World War II until the death of dictator Enver Hoxha in 1985.23 Their isolation from other societies brought certain advantages to the Tasadays and Albanians: They did not have to be concerned, for example, that another society might cut off their supply of essential foods or tools. Of course, for both societies the price of their independence was having to do without products that they could not produce themselves.
In most countries, governmental policy has focused on achieving the advantages of independence without paying too high a price in terms of consumer deprivation. China and India, for example, have pursued economic independence much more vigorously than have Brazil and Mexico, with different results in different periods.24 Earlier in this chapter we showed that large countries typically depend much less on foreign trade than do small countries, but even in large countries consumers could suffer through policies designed to promote more independence. The degree of suffering would, of course, depend on the type of product: The elimination of coffee or tea imports into the United States would probably involve less of a hardship than the cessation of foreign purchases of certain essential metals, such as manganese, cobalt, and chromium. In between are products that could be produced domestically, but at a much higher price. No country today seeks complete independence, but most try to forge their trade patterns so that they are minimally vulnerable to foreign control of supply and demand..
Interdependence
One way of limiting one's vulnerability to foreign changes is through interdependence, or the development of trade relationships on the basis of mutual need. France and Germany, for example, have highly interdependent economies^ Each depends about equally on the other as a trading partner, and thus neither is likely to cut off supplies or markets because the other could retaliate effectively.
INTERDEPENDENCE, AND DEPENDENCE!
The concepts of independence, interdependence, and dependence help to ex- plain world trade patterns and countries' trade policies. They form a continuum, with independence at one extreme, dependence on the other, and
interdependence somewhere in the middle. There are no countries located at
either extreme of this continuum; however, some tend to be closer to one
extreme than the other.
Independence
In a situation of independence, a country would have no reliance on others for any g00ds, services, or technologies. Since all countries engage in trade, however, no country has complete economic independence from other countries, and all thus have at least some access to goods and services produced in a foreign country. The most recent instance of economic near-independence was seen in the Tasaday tribe, found by hunters on the island of Mindanao in the southern Philippines in 1971. Although some scientists have called the Tasadays a hoax, many others believe that the tribe may indeed
have been the last group on earth to live in virtual isolation. A less extreme example is Albania, which experienced near-isolation from the end of World War II until the death of dictator Enver Hoxha in 1985.23 Their isolation from other societies brought certain advantages to the Tasadays and Albanians: They did not have to be concerned, for example, that another society might cut off their supply of essential foods or tools. Of course, for both societies the price of their independence was having to do without products that they could not produce themselves.
In most countries, governmental policy has focused on achieving the advantages of independence without paying too high a price in terms of consumer deprivation. China and India, for example, have pursued economic independence much more vigorously than have Brazil and Mexico, with different results in different periods.24 Earlier in this chapter we showed that large countries typically depend much less on foreign trade than do small countries, but even in large countries consumers could suffer through policies designed to promote more independence. The degree of suffering would, of course, depend on the type of product: The elimination of coffee or tea imports into the United States would probably involve less of a hardship than the cessation of foreign purchases of certain essential metals, such as manganese, cobalt, and chromium. In between are products that could be produced domestically, but at a much higher price. No country today seeks complete independence, but most try to forge their trade patterns so that they are minimally vulnerable to foreign control of supply and demand..
Interdependence
One way of limiting one's vulnerability to foreign changes is through interdependence, or the development of trade relationships on the basis of mutual need. France and Germany, for example, have highly interdependent economies^ Each depends about equally on the other as a trading partner, and thus neither is likely to cut off supplies or markets because the other could retaliate effectively.
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