In advance of other comments: 1. Declining marginal utility of specific goods and non-uniform initial distributions of goods over people (this one matters). 2. There is a finite length of the production chain that one person can accomplish if something would take longer than an entire human lifetime to produce. Suppose I luck into a massive amount of unobtanium, with perfect property rights. To some extent this is 1, but I might also desire goods that I could not produce in an individual life, and by trade acquire them (this one isn’t that critical). 3. Building on 2, some goods are only possible at the end of extremely expensive or complex production chains: effectively high startup costs imply that not everyone should produce a good. For example, “an airplane” is something that a small fraction of is not nearly as valuable as the whole entity, and there are small enough fractions that are worthless as airplanes. (you might consider this solved by star-trek transporters, which deal with a similar problem and you thus consider the class of problems solved. That said, I consider this a key source of gains from trade) 4. There’s a more pedantic point that as an economist I feel obligated to make: Increasing marginal utility of two goods over a relevant range implies gains from trade (this one doesn’t matter for most understandings of trade)
After reading other comments: Jsevillamolhas a good point about insurance that I missed. Villam has a thoughtful point about R&D that I think is covered by the Matrix but arguably counts. Measure’s point about shared equipment relates to time-sharing and startup costs, though framed differently.
In advance of other comments:
1. Declining marginal utility of specific goods and non-uniform initial distributions of goods over people (this one matters).
2. There is a finite length of the production chain that one person can accomplish if something would take longer than an entire human lifetime to produce. Suppose I luck into a massive amount of unobtanium, with perfect property rights. To some extent this is 1, but I might also desire goods that I could not produce in an individual life, and by trade acquire them (this one isn’t that critical).
3. Building on 2, some goods are only possible at the end of extremely expensive or complex production chains: effectively high startup costs imply that not everyone should produce a good. For example, “an airplane” is something that a small fraction of is not nearly as valuable as the whole entity, and there are small enough fractions that are worthless as airplanes. (you might consider this solved by star-trek transporters, which deal with a similar problem and you thus consider the class of problems solved. That said, I consider this a key source of gains from trade)
4. There’s a more pedantic point that as an economist I feel obligated to make: Increasing marginal utility of two goods over a relevant range implies gains from trade (this one doesn’t matter for most understandings of trade)
After reading other comments:
Jsevillamol has a good point about insurance that I missed. Villam has a thoughtful point about R&D that I think is covered by the Matrix but arguably counts. Measure’s point about shared equipment relates to time-sharing and startup costs, though framed differently.