5 ms·

The Metal Age of Thailand and Ricardo's Law of Comparative Advantage

27 points by benbreen 5y ago

amin 5y ago
I’m confused. What does this say in normal English?
- foota 5y ago
  Different parts of the region specialized in one kind of metal production and traded with the others for the other metals they needed. They didn't have a single ruler but were each self ruling.
  - amin 5y ago
    Thank you. I was familiar with Ricardo but didn't understand the word spaghetti about metals in the article.
- mdp2021 5y ago
  Ricardo's law is the advantage of specialization. If A can produce more value by producing X instead of Y, it is best to produce the former and buy the latter - that efficiency in production creates a possibly counter-intuitive extra for both trading parties. «In this kind of economy, communities specialize in producing certain goods in order to participate in the regional exchange system [...] they see their efforts are better spent in producing other products to exchange for desired goods made in other villages or regions. [...] development of a regional economic system rooted in exchange networks among communities underpinned the peaceful heterarchical metal age socio-political system that endured in Thailand for over two millennia»
- sirn 5y ago
  In the old model of metal age, metals are developed by a society that is hierarchical or militaristic (as development of metal is a very complex process with specialized knowledge and tooling). This old model cannot be applied to an archaeological site in Thailand (Ban Chiang / Ban Non Wat / etc.) due to evidences demonstrating absence of control over metal production in the region. The research paper suggested that the region developed its metal age by trading rather than by any ruling entity, by applying Ricardo's Law to the distribution of metal artifact in the region.
robocat 5y ago
> Ricardo's Law of Comparative Advantage https://en.wikipedia.org/wiki/Comparative_advantage https://en.wikipedia.org/wiki/Comparative_advantage Hours of work necessary to produce one unit: Cloth Wine England 100 120 Portugal 90 80 In the absence of trade, England requires 220 hours of work to both produce and consume one unit each of cloth and wine while Portugal requires 170 hours of work to produce and consume the same quantities. If each country specializes in the good for which it has a comparative advantage, then the global production of both goods increases. Countries can trade surpluses for shortfalls and be better off overall.
- CyanBird 5y ago
  Yeah, it works very, very well, the basis of modern international trade networks It sadly has externalities such as compounding benefits of manufacturing, or the inherent nature of anarchism on international relations which as the model of Joan Robinson showcases it leads to lopsided effects on economic development such as was the relationship of Portugal - England, or the de industrialization of India for the benefit of having a hostage market to British early phases of manufacturing
xyzzyx 5y ago
While some forms of comparative advantage might occur in the real world, Ricardo's theory, like so much of economics, abstracts away fundamental facts about the financial and biophysical aspects of development to such an extent that I do not see it as a useful tool of economic analysis. See for instance: https://www.brookings.edu/research/diversification-or-specialization-what-is-the-path-to-growth-and-development/ https://www.brookings.edu/research/diversification-or-specia... https://atlas.cid.harvard.edu https://atlas.cid.harvard.edu https://americanaffairsjournal.org/2017/08/ricardos-vice-virtues-industrial-diversity/ https://americanaffairsjournal.org/2017/08/ricardos-vice-vir... This in general seems like a good reason for realism over empiricism within economics, many toy theories such as Ricardian comparative advantage can be used to interpret real world data and be assigned scientific credibility in the process, you have to open up the black boxes at all levels of aggregation to get beyond that.

27 points by benbreen 5y ago

amin 5y ago

I’m confused. What does this say in normal English?

foota 5y ago
Different parts of the region specialized in one kind of metal production and traded with the others for the other metals they needed. They didn't have a single ruler but were each self ruling.
- amin 5y ago
  Thank you. I was familiar with Ricardo but didn't understand the word spaghetti about metals in the article.
mdp2021 5y ago
Ricardo's law is the advantage of specialization. If A can produce more value by producing X instead of Y, it is best to produce the former and buy the latter - that efficiency in production creates a possibly counter-intuitive extra for both trading parties. «In this kind of economy, communities specialize in producing certain goods in order to participate in the regional exchange system [...] they see their efforts are better spent in producing other products to exchange for desired goods made in other villages or regions. [...] development of a regional economic system rooted in exchange networks among communities underpinned the peaceful heterarchical metal age socio-political system that endured in Thailand for over two millennia»
sirn 5y ago
In the old model of metal age, metals are developed by a society that is hierarchical or militaristic (as development of metal is a very complex process with specialized knowledge and tooling). This old model cannot be applied to an archaeological site in Thailand (Ban Chiang / Ban Non Wat / etc.) due to evidences demonstrating absence of control over metal production in the region. The research paper suggested that the region developed its metal age by trading rather than by any ruling entity, by applying Ricardo's Law to the distribution of metal artifact in the region.

robocat 5y ago

> Ricardo's Law of Comparative Advantage https://en.wikipedia.org/wiki/Comparative_advantage https://en.wikipedia.org/wiki/Comparative_advantage Hours of work necessary to produce one unit: Cloth Wine England 100 120 Portugal 90 80 In the absence of trade, England requires 220 hours of work to both produce and consume one unit each of cloth and wine while Portugal requires 170 hours of work to produce and consume the same quantities. If each country specializes in the good for which it has a comparative advantage, then the global production of both goods increases. Countries can trade surpluses for shortfalls and be better off overall.

CyanBird 5y ago
Yeah, it works very, very well, the basis of modern international trade networks It sadly has externalities such as compounding benefits of manufacturing, or the inherent nature of anarchism on international relations which as the model of Joan Robinson showcases it leads to lopsided effects on economic development such as was the relationship of Portugal - England, or the de industrialization of India for the benefit of having a hostage market to British early phases of manufacturing

xyzzyx 5y ago

While some forms of comparative advantage might occur in the real world, Ricardo's theory, like so much of economics, abstracts away fundamental facts about the financial and biophysical aspects of development to such an extent that I do not see it as a useful tool of economic analysis. See for instance: https://www.brookings.edu/research/diversification-or-specialization-what-is-the-path-to-growth-and-development/ https://www.brookings.edu/research/diversification-or-specia... https://atlas.cid.harvard.edu https://atlas.cid.harvard.edu https://americanaffairsjournal.org/2017/08/ricardos-vice-virtues-industrial-diversity/ https://americanaffairsjournal.org/2017/08/ricardos-vice-vir... This in general seems like a good reason for realism over empiricism within economics, many toy theories such as Ricardian comparative advantage can be used to interpret real world data and be assigned scientific credibility in the process, you have to open up the black boxes at all levels of aggregation to get beyond that.