4 ms·
Classic all or nothing thinking. You must pick between producer and consumer, and no balance can be struck. If any regulation is bad, we have to get rid of al
by advisedwang 5y ago
Classic all or nothing thinking.
You must pick between producer and consumer, and no balance can be struck.
If any regulation is bad, we have to get rid of all regulation.
If growth is good, we have to grow at any cost.
- freeopinion 5y agoCoincidentally, David Ricardo's argument against England's Corn Laws a generation earlier (again dealing with import restrictions) gave birth to the economic theory of comparative advantage. A simple example of this argument does lead to all or nothing and makes a very strong mathematical argument that anything else would be disadvantageous.
- dr_dshiv 5y agoCould you unpack that further? What’s the mathematical argument?
- deleted 5y ago[deleted]
- freeopinion 5y agoAlice can grow 20 tons of apples or 15 tons of pumpkins for Halloween. Bob can grow 15 tons of apples or 10 tons of pumpkins. The opportunity cost to Alice of growing 1 ton of apples is 3/4 ton of pumpkins. The opportunity cost to Alice for growing one ton of pumpkins is 4/3 tons of apples. The opportunity cost to Bob of growing 1 ton of apples is 2/3 ton of pumpkin. For 1 ton of pumpkin it is 3/2 tons of apples. It costs Alice more to grow apples than it costs Bob: 3/4 vs 2/3. It costs Bob more to grow pumpkins than it costs Alice: 3/2 vs 4/3. Although Alice can grow both crops better than Bob can, it is in both their interests to have Alice specialize in pumpkins while Bob specializes in apples. In this simple example--with no other real-life considerations--all or nothing is better for both.
- dr_dshiv 5y agoThank you so much for the clear and compelling example.
- freeopinion 5y agoI'll pass your thanks on to Ricardo. See "On the Principles of Political Economy and Taxation" circa 1817. Published just in time for Halloween.