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http://economixcomix.com/home/tpp/

Discussion of the cartoon spawned a very argumentative thread on reddit, with as far as I can tell no hint of a consensus.

I'm specifically interested in whether the cartoon has any specific factual errors or economic misconceptions, and if so whether those mistakes are serious or not.

user1205901 - Слава Україні
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    As written, this seems primarily opinion based. Would you alter this to instead address what is accurate and inaccurate about the comic? – BKay Jun 25 '15 at 14:07
  • OK, I just edited the title to focus more on the issue of whether there are errors. – user1205901 - Слава Україні Jun 25 '15 at 14:10
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    Maybe make it more specific regarding which part of the cartoon is wrong too. The first page doesn't seem very serious anyhow. – VicAche Jun 25 '15 at 14:26
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    (After reading brielfy, it seems that it's correct, from an economics point of view) – VicAche Jun 25 '15 at 14:42
  • I am not a fan of the stock exchange but on pg 14 they pretty much just claim that buying stocks has no effect on investment, not even an indirect one. The author probably knows that it is more nuanced (there is again a reference to "good economists") but leaves it at that. – Giskard Jun 25 '15 at 15:18
  • It would be helpful if, like @VivAche said, you could specify what part you want commented on. Eg. "Is (statement) economically valid?" Or, "What is the evidence for or against (this)?" – philE Jun 25 '15 at 16:52
  • I think the arguments the cartoon is making about free trade agreements could apply equally well to the cartoon itself. – Lumi Jun 25 '15 at 18:16

1 Answers1

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Small mistake #1: What capital is

The author identifies "bonds, real estate deeds, stock certificates" with "capital" (p. 5). But in mainstream economics, capital refers not to these, but to durable goods that can be used to produce other goods and services.

It may be argued that this is a mere quibble, since the author is communicating to a mass audience and in everyday parlance, that is what people think of as capital. Unfortunately, "capital" recurs throughout the comic and is, indeed, a key component of his arguments against free trade. He frequently conflates "capital" in the fuzzy, ill-defined layman sense and "capital" in the more precisely defined sense that is used in academic economics.

For example:

On pp. 5-6, capital is depicted as pieces of paper ("bonds, real estate deeds, stock certificates") that China owns.

enter image description here

Then on p. 12, capital is depicted as businesses that are shipped off on boats from Iceland to Guatemala.

enter image description here

Then on p. 13, "stocks, bonds, and real estate" (which he defined earlier to be capital) are given to some Chinese-looking man on the left, who then gives back in turn $ \$ $ to the grouchy, jowly man in the middle, who then distributes this $ \$ $ either as savings or investment. Investment is depicted as some excavators constructing some buildings. The text below then claims, "People who 'buy capital' are investing their money." This is all terribly wrong and confusing: So what exactly is capital? Is it something that corresponds to the $ \$ $ symbol? Is it "stocks, bonds, and real estate"? Is it excavators or buildings? What is its relation to savings and investment?

As already said above, capital refers to durable goods used to produce other goods and services. Investment in turn refers simply to the purchase of capital.

enter image description here

On p. 21, capital is depicted instead as boxes being shipped off on a boat by some corporate fat-cat displaying his middle finger. It is unclear what is in the boxes (pieces of paper? excavators? office buildings?).

enter image description here

P.S. I am not an expert on trade. This small mistake is merely one I managed to spot. In my opinion there are many more mistakes. But this post is long enough, so I hope someone who is an expert on trade will find it her duty to explain the other mistakes, especially since this comic has for some reason received undeserved attention.

  • I think you are mistaking mistakes and the fact that depictions lack preciseness. Lumi's comment on the question seems much more on spot than this answer, which falls in the very same pit as the cartoon author himself and the bad economists it denounces... – VicAche Jun 28 '15 at 21:43