Great analogy from Peter Schiff:
Let’s suppose six castaways are stranded on a desert island, five Asians and one American. Their problem is hunger.

So they sit down and divide labor as follows: One Asian will do the hunting, another will fish, the third will scrounge for vegetation, the fourth will cook dinner, and the fifth will gather firewood and tend the fire. The sixth, the American, is given the job of eating.

So five Asians work all day to feed one American, who spends his day sunning himself on the beach. The American is employed in the equivalent of the service sector, operating a tanning salon that has one customer: himself. At the end of the day, the five Asians present a painstakingly prepared feast to the American, who sits at the head of a special table built by the Asians specifically for this purpose.

Now the American is practical enough to know that if the Asians are going to continue providing banquets they must also be fed, so he allows them just enough scraps from his table to sustain them for the following day’s labor.

Modern-day economists would have you look at the situation just described and believe that the American is the lone engine of growth driving the island’s economy; that without the American and his ravenous appetite, the Asians on the island would all be unemployed.

6 Responses to “Analogy”

  1. 1 December 24, 2008 at 06:35 am by IMHO...it's a shi*tty analogy!

    A more accurate analogy would be if the American lived at another Island and imported goods and services from the Asian Island.

    The Asian Island has it's own society and the American makes the best option for his own society: out source the labor.

    Off course this only works for about 30 years...but don't bash the American. He only took the most intelligent route he could.

    Meanwhile, 30 years later, the Asians have never been so rich and the American "has never been so poor".

    Please consider ALL the sides of the story before you make the wrong assumptions.

    The big problem with the US is that they handed over almost ALL their production to foreign countries.

    This worked out great until "everybody" (or at least, most of the population) started to live large in the US.

    Dont bash them because of some stupid military and economic choices made by only a few. You should instead praise them for all the developments they have made over the last century and the good times they provided us (for instance, with entertainment).

    Having said this, the only thing i can add is: God Bless America and everybody else who deserves it.

    I've never seen such a great nation. When they fight, they do it with pride.

    They're the most genuine patriotic people i have met and would do ANYTHING for their country.

    Even if the invasion of Iraque was strategic, should i remind you that extremist Islamics invaded their country in a cowardly manner and killed thousands of people (according to wikipedia, there were an estimate of 17400 civilian people inside the world trade center)?

    If you really loved your country, would you oppose a war on terrorism?

    We all know that the US always acted like "the good guys that have to free the world" (it all started when we needed their help during World War I). Now add that to the fact they were REALLY invaded this time and tell me what would you REALLY do if you loved your country and were willing to die for it?

    I would like to ask you to reflect on what the words i wrote!

    Best regards,
    Luís Miguel Silva

  2. 2 December 24, 2008 at 09:40 am by Pedro

    Luis Miguel, I don't disagree with you. I am a big fan of America. And globalization did an amazing job of reducing poverty in the world.

    And I think the analogy would even be better by replacing the American by a Portuguese. We produce very little compared to what we consume.

    IMHO the key message is the "modern economist". We are being brainwashed to think that whatever does the job of reducing unemployment is good. And that can be very stupid.

  3. 3 December 24, 2008 at 12:02 pm by Well...

    The analogy seems to be against globalization!

    I think it is a good thing...it just depends on how it is "implemented" ;o)

    Have a great Christmas!
    Luís Miguel Silva

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