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If entity A can create something(labor/product) cheaper (more efficiently) than entity B, then B can purchase that something for cheaper than what it would cost
by ghastmaster 4y ago
If entity A can create something(labor/product) cheaper (more efficiently) than entity B, then B can purchase that something for cheaper than what it would cost B to do/produce it. Now B has extra resources to devote to what B is efficient at creating and A purchases products that B is efficient at producing at less than what it would cost A. The net result is each entity has spent less time and resources for goods and services, and can use the savings (capital) to devote to future endeavors.
This basic idea scales up to the country level provided all the rules and regulations do not interfere. The problem with the shrinking status of the lower classes in the USA is not division of labor throughout the world. The imbalance of worldwide division of labor is primarily a symptom of disastrous monetary policy by the Federal Reserve bank and Congress and ill conceived regulations.
- surement 4y agounfortunate that you're getting downvoted for explaining comparative advantage; none of these "we could face unfair competition from other countries" comments seem to understand this basic concept
- ghastmaster 4y agoTo be fair, I did tarnish the simple explanation with an opinion on why the lower classes are worse off. I knew the risk I was taking when I added that.