> Please explain how a “market” is anything other than steady state if all externalities are accounted for?

I took micro-economics in highschool, and when discussing how trade is overall beneficial, they trotted out the old example of two countries, each producing bicycles and bananas.

The purpose of the exercise is to show that if each country focuses on one item and specializes on it, everyone benefits.

I always found that example to be deeply disturbing. If given a choice, who would actually prefer to live the banana country rather than the bicycle country? Even in highschool this silly example demonstrated the absurdity of classical economics.