A super-majority of economists also did not seem to notice that a housing bubble was driving the American economy for a decade - economists are usually morons.

A super-majority of economists also did not seem to notice that a housing bubble was driving the American economy for a decade - economists are usually morons. In this case the argument goes back to Ricardo, who said that countries should pursue their comparative advantage (whatever they're best at) in order to maximize their gains from trade. This is true, mathematically, and has been orthodoxy ever since, perhaps because economists are more interested in nice mathematical models than actual real-world development. However, this argument doesn't account for history and technological development, which is what the OP is arguing I think. I am fond of recommending this essay by Philip Pilkington on this subject: https://fixingtheeconomists.wordpress.com/2014/05/01/arguments-against-free-trade-and-comparative-advantage/ https://fixingtheeconomists.wordpress.com/2014/05/01/argumen... and especially, this example of the fate of England and Portugal (quoting Joan Robinson): >The most misleading feature of the classical case for free trade (and the arguments based upon it in modern textbooks) is that it is purely static. It is set out in terms of a comparison of productivity of given resources (fully employed) with or without trade. Ricardo took the example of trade between England and Portugal. He argued that England, by allowing imports of wine from Portugal, would expand the production and export of cloth to pay for it. Ricardo, of course, was thinking of the English side of the exchange but the analysis is perfectly symmetrical; it implies that Portugal will gain from specialising on wine and importing cloth. In reality, the imposition of free trade on Portugal killed off a promising textile industry and left her with a slow-growing export market for wine, while for England, exports of cotton cloth led to accumulation, mechanisation and the whole spiraling growth of the industrial revolution.