The Relative Gains Problem

Trade is good! Until states start using it against each other…

Takeaway Points

  1. Power is relative.
  2. Surplus is essentially economic wealth.
  3. States must decide whether to invest economic wealth to build inherently desirable goods (schools, parks, health care, and so forth) or military technology.
  4. States facing extremely disadvantageous trade agreements would prefer no trade to some trade due to the long-run military implications.