Grr, Grr, Grrr

Look, yes, comparative advantage is one of those things that\’s really hard to grasp. It is counter intuitive.

But, but, et tu Dave?

This (lovely and interesting) map isn\’t showing comparative advantage. It\’s showing absolute advantage.

A country which is \”best\” at something has an absolute advantage. Comparative advantage is about that we do (whether country or individual) the thing which we are least bad at given our range of possibilities.

The whole point is that even if Iran is the best at producing pistachios, then even though they are better than us at producing pistachios, if the thing that we do best of the things it\’s even possible that we can do is produce pistachios then pistachios we should produce. Yes, even though Iran is better at it than we are.

Grr, Grr, Grrr…..

4 comments on “Grr, Grr, Grrr

  1. From ‘In the Courts’This Week’ Page:

    Giving evidence, Sgt Worstall of the Vice Squad said that on the Sunday evening he recognised the defendant, Ms Richelle Spuddy, standing on the corner adjacent to Scott’s Autotraders (Dodgydealz-R-Us) Ltd. She was dressed in a short leather skirt, fishnet stockings & was swinging her handbag & accosting passers-by with the words “Want a good time, Dearie?” Sgt Worstall said that shortly after, he saw her in conversation with a stocky, balding man. A sum of money was seen to change hands & the man accompanied the defendant into a nearby alley. On entering the alley, Sgt Worstall witnessed the defendant on her knees in front of her companion performing a sexual act.
    The defendant said that she did not deny the offence but stated that she had committed it to bring the police’s attention to the problems of prostitution in the area.
    Mr Justice Populus adjourned the case for psychiatric reports

  2. “The whole point is that even if Iran is the best at producing pistachios, then even though they are better than us at producing pistachios, if the thing that we do best of the things it’s even possible that we can do is produce pistachios then pistachios we should produce.”

    Unless it’s female circumcision – I’m looking at you, Djibouti.

  3. It took me a few days to spot this – sorry for taking so long to get back to you.

    I like your point, but I didn’t interpret the map this way.

    All of this labeling is based on underlying measurements. I don’t think in a world with voluntary exchange – and in spite of what guys like you and me complain about, almost every exchange we make is still voluntary – that you’re ever likely to observe absolute advantages in the wild.

    For example, it looks like Estonia leads the world in adult literacy. I don’t think Estonians have an absolute advantage in getting adults to read. I think they choose to read because there is comparatively little else to do (besides take a ferry to Stockholm and get loaded).

    So, I stand by my post.

    Cheers,
    Dave

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