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When you say that the US needs to "invest in itself", what you really mean is that the US needs to divert investments from industries in which it has a comparat
by KKKKkkkk1 7y ago
When you say that the US needs to "invest in itself", what you really mean is that the US needs to divert investments from industries in which it has a comparative advantage into industries that developing countries have a comparative advantage in.
- creddit 7y agoIf investment were somehow zero sum, yes that's a large part of what I would mean. Luckily, for my point to continue standing without being reduced to that, investment is indeed not zero-sum.
- function_seven 7y agoThe current situation is showing us that the comparative advantage may not be as great as we thought it was for overseas manufacturing. When doing the arithmetic, a term for “national security” may have been underweighted or entirely left out.
- remarkEon 7y agoThe "comparative advantage" we enjoy is an artificial creation of deliberate policy choices. The traditional "well this is just econ 101" macroeconomic lectures describe scenarios as they exist, not how they should be. The "comparative advantage" that you think developing countries have is using cheap slave wage labor to produce an unending wave of cheap (mostly plastic) consumer goods that people are quickly realizing in this pandemic they don't really need. Not to mention non-existent environmental regulations. I hope that this crisis makes people do a deep introspection of their consumption habits, and realize where these "goods" actually come from, and whether it was really worth it to stock our giga stores with this stuff.
- AdrianB1 7y agoYou can die in a pandemic still singing the song about the "comparative advantage". Not to mention that there is no comparative advantage when you ignore the buzzwords and actually do the comparison seriously.