This is the economic equivalent of steering a passenger airplane into a mountain because it was their first time reading a map.
07.04.2025 11:08
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This is the economic equivalent of steering a passenger airplane into a mountain because it was their first time reading a map.
6) Lastly, it is worth thinking about all the things we might not have if we isolated ourselves from the rest of the world. That is, we give up time for invention and innovation when we don’t work together…
5) Thus the term comparative in “comparative advantage” is not merely suggesting comparisons across countries or people. It is about comparing the costs of producing all the things I want to consume. Going it alone is costly.
4+) The most important facet of comparative advantage is more personal than is commonly emphasized. That is, I give up something that I would rather be doing when I have to do many things. “We” is nowhere in the previous sentence.
4) Autarky forces us to think about a world where we are all on our own. We are tasked with producing all goods. It is not hard to imagine the deep frustration we would soon feel in such a world. When I do the dishes, I am thinking about how I would rather be doing this or that.
3) In the background of these examples is the far removed world of “autarky” (less and less far removed as of late) in which a country must try and produce everything on its own. But this is really where the non-triviality of comparative advantage comes from.
2) Most of us are introduced to comparative advantage in an introductory economics course. We are given a glimpse at the surprising result that Ricardo famously wrote up; two goods, one country has absolute advantage in both, but comparative advantage incentivizes trade.
1) That it took a Nobel laureate several years to think about the appropriate response (purportedly) makes it incumbent on the rest of us to really think about the concept of comparative advantage.
Paul Samuelson was once pressed to give an example of some result in the social sciences which is both true and non-obvious. Supposedly, he thought about the question for years and then gave the example of comparative advantage. Some thoughts below🧵
www.forbes.com/sites/timwor...
4++) The solution is rather obvious then. If I didn’t have to do the dishes, then I’d be better off. Indeed, I have entered a trade agreement with my dishwasher!
And to think the notion of autarky was once so far fetched…
This is really smart by @sanders.senate.gov Go to republican districts and push voters to pressure their republican reps.
www.commondreams.org/news/bernie-...