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Points one, two, and three seem to be mutually contradictory. I understand the counterintuitive part of comparative advantage. Your fry cook should concentrate
by soVeryTired 10y ago
Points one, two, and three seem to be mutually contradictory. I understand the counterintuitive part of comparative advantage. Your fry cook should concentrate on what he's least bad at. But maybe he can take a computer science class and become better at that.
In any case do you at least acknowledge that this stuff isn't clear cut? Or at least far less clear cut than the naive theory presents it?
- snrplfth 10y agoWell, yes, comparative advantage changes, and must be discovered through tests in markets. So the fry-cook becomes a computer scientist - but people still desire fries. So, the person who is now least bad at fast food cooking can move into that job. The overall point of comparative advantage is that, at any given time, and with any given arrangement of skills and capital, it's generally for the best to allow open trade between entities - the main reason being that total production, and therefore total consumption, can be maximized. It certainly is not an argument for a static economy, and doesn't assume one.