Turns out following exactly that line of orthodox (Comparative Advantage) is how you get a PhD in economics. The theory makes perfect sense and can be observed

Turns out following exactly that line of orthodox (Comparative Advantage) is how you get a PhD in economics. The theory makes perfect sense and can be observed to be true in evidence across the world. Where it fails is that governments, politicians and central banks understand the theory as well and can use it to their advantage. Namely this: you can bankrupt your competition by undercutting them - this is capitalism 101. Turns out you can do this at country-scale too! It is obvious but PhD economists cannot see it happen. They will hold onto their comparative advantage theory all the way to the poorhouse. One supposed limiting factor to country-level jungle of capitalism is the Impossible Trinity. Quoting wikipedia: "It is impossible to have all three of the following at the same time: 1. a fixed foreign exchange rate 2. free capital movement (absence of capital controls) 3. an independent monetary policy" Like an undying belief in Comparative Advantage, you cannot move up to the upper echelons of PhD Economist work without a bedrock belief in the Impossible Trinity. In reality, turns out a dual currency structure is a great way to blow through the limitations of the Impossible Trinity. China is a spectacular success in lifting hundreds of millions of people out poverty. The Chinese people are hard working and innovative. One of their genius moves has been to create a dual-currency structure: the onshore and offshore yuan. This dual currency structure is an absolutely brilliant solution - it affords the Chinese leadership tremendous opportunity to manage their own growth while circumventing the Impossible Trinity. What is hard for me understand is why Econ PhDs with obvious evidence in front of them continue to disregard reality. https://en.wikipedia.org/wiki/Comparative_advantage https://en.wikipedia.org/wiki/Comparative_advantage https://en.wikipedia.org/wiki/Impossible_trinity https://en.wikipedia.org/wiki/Impossible_trinity https://en.wikipedia.org/wiki/Internationalization_of_the_renminbi https://en.wikipedia.org/wiki/Internationalization_of_the_re...