15% of the energy use embodied in trade turns out to be induced by final consumption, and 85% is attributed to intermediate production https://www.researchgate.net/publication/320445428_Global_primary_energy_use_associated_with_production_consumption_and_international_trade
Steve you say EROI is only relevant to extractive industries I think this paper shows that is not correct. I think you are correct that International Trade is relevant, the relevance economically is relevant at the EROI embodied energy level though. Money in International Trade is a Convenient Posit ( Quine)(*1) What is important regarding that is that the receipt of currency can be exchanged for something tangible, the money receive is not an end in itself. Looked at in EROEI and embodied energy terms it actually makes your point crystal clear. That said its pretty clear to those who are objectively considering the point.
(*1)P.41 para 2. http://letthemconfectsweeterlies.blogspot.se/2018/03/energy-returned-on-energy-invested.html
Bill Mitchell has a new post “A surplus of trade discussions” responding to some of the criticisms of the MMT position on trade deficits (though he didn’t link to any of them, including my post “Some Preliminary Questions for MMT“). He opens with the proposition that “exports are a cost and imports are a benefit”, and reaches the following conclusion:
When it comes to trade, MMT focuses, initially on the real layer of the analysis.
Thus it is undeniable (and I am surprised to read all those who are torturing themselves trying to deny it) – exports are a cost and imports are a benefit.
Giving some real thing away is a cost. Getting some real thing is a benefit.
That doesn’t equate, as I have been reading the last few weeks, in a conclusion that MMT’s preference is for a nation to have a current account deficit.
It just states the obvious fact that exports, by definition, involve sacrificing real resources and depriving a nation of their use.
Imports on the other hand clearly involve receiving final goods and services where the real resource sacrifice has been made by the exporting nation.
In a world where we produce to consume – not for its own sake – then receiving goods and services is better (real terms) than sending them elsewhere.
- Standard Neoclassical work on the irrelevance of opportunity cost below full employment
- Marx’s arguments on the irrelevance of the seller’s utility in trade
- The extensive Post Keynesian research on declining marginal costs of production and economies of scale.
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