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> 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 disc

> 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.

ulucs 7y ago
These are the times when the required civility of HN comments makes me sad. 1. OK boomer, but I do want to live in my banana country along with millions more. You know that there are countries/states/regions whose main exports are farming, and people who enjoy living there, right? You don't think it's because they don't have a choice, right? I mean I could assume that you think they don't have the brains/skills/etc for whatever industrial job you do given your shallow dismissal of economics as a science with a econ 101 science, but I really, really, really hope you don't. 2. Really, economics is the science of human preferences. The fact that there exist humans who don't act the same way as you do is the whole point. Else there would be nothing left for studying in behaviorial or other types of descriptive economics. The fact that there exists a representative agent in collective situations is just a convenience for calculation. 3. You missed the whole point of the toy exercise, which is comparative advantage. Unless you are completely self sustaining, you are benefitting from comparative advantage by selling your labor and buying others' fruits of labor. Hell, that's the only reason we invent machines to do our bidding.

ulucs 7y ago

These are the times when the required civility of HN comments makes me sad. 1. OK boomer, but I do want to live in my banana country along with millions more. You know that there are countries/states/regions whose main exports are farming, and people who enjoy living there, right? You don't think it's because they don't have a choice, right? I mean I could assume that you think they don't have the brains/skills/etc for whatever industrial job you do given your shallow dismissal of economics as a science with a econ 101 science, but I really, really, really hope you don't. 2. Really, economics is the science of human preferences. The fact that there exist humans who don't act the same way as you do is the whole point. Else there would be nothing left for studying in behaviorial or other types of descriptive economics. The fact that there exists a representative agent in collective situations is just a convenience for calculation. 3. You missed the whole point of the toy exercise, which is comparative advantage. Unless you are completely self sustaining, you are benefitting from comparative advantage by selling your labor and buying others' fruits of labor. Hell, that's the only reason we invent machines to do our bidding.