Cameron is wrong to think that we're engaging in a global race

A far worse crime than this morning's Twitter gaffe is David Cameron's insistence that the UK is competing in a "global race".

Paul Krugman's "What Do Undergrads Need To Know About Trade?" is excellent (and Krugman's academic work is generally worth reading) on this economics faux pas:

One of the most popular, enduring misconceptions of practical men is that countries are in competition with each other in the same way that companies in the same business are in competition. Ricardo already knew better in 1817. An introductory economics course should drive home to students the point that international trade is not about competition, it is about mutually beneficial exchange.

Even more fundamentally, we should be able to teach students that imports, not exports, are the purpose of trade. That is, what a country gains from trade is the ability to import things it wants. Exports are not an objective in and of themselves: the need to export is a burden that a country must bear because its import suppliers are crass enough to demand payment.

Eliminating further trade and capital flow barriers could increase global GDP by just a few percentage points - but remember how low growth we're currently experiencing is relative to these gains:

So rather than suggesting that trade resembles a "global race" with winners and losers, Cameron should sing the praises of trade, a collaborative process from which we can all benefit.