Mostly summarized from Gregory Mankiw’s Principles of Economics, 5th Ed.

PART 3 Markets and Welfare
Chapter 9 of 36 Application: International Trade
Section 18 of 18
…
Suppose the president of the country Isoland ignores the pro-free trade advice of her economics team and decides not to allow free trade in textiles.
She decides this because it would result in imports of low cost textiles hurting current domestic textiles producers and jobs.
Soon after, an Isoland inventor discovers a new way to make textiles at very low cost and is able to keep his method a secret.
Surprisingly, the inventor
· doesn't need regular inputs such as cotton or wool, the only material input is wheat
· needs little labor input to manufacture textiles from wheat with this method
The inventor is celebrated as a genius.
…
With the new lower cost of textiles coming out of his factory prices of clothing go down and all Isolanders enjoy a higher standard of living because they have more money to buy other things.
Textile workers in Isoland experience some hardship when their factories close but find employment in other industries.
Some become farmers and grow the wheat the inventor turns into textiles.
Others find jobs in new industries that emerge as a result of the higher Isoland living standards.
…
Several years later a newspaper reporter investigates this mysterious new textiles production process.
She sneaks into the inventor's factory and learns: the inventor is a fraud.
His method does not involve making textiles.
Instead, he has been smuggling wheat out of the country and smuggling textiles in from other countries.
The inventor’s only discovery: the gains from international trade.
…
The Isoland government then shuts down the inventor's operation.
The price of textiles and clothing rise, and workers return to textile jobs.
Isoland living standards fall back to their previous lower levels.
The inventor is jailed and publicly ridiculed.
“He is no inventor, he’s just an economist!”
(end of chapter 9 of 36)
…
Congratulations! 9/36 = 25% of way to becoming a competent economist.

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