Err, no Ms. Orr, no

The idea that humans can build economies by trading rests on the assumption that anyone with a skill can create something that others will want to buy.

No, it ain\’t.

It\’s based upon comparative advantage. The idea that even if you don\’t have a skill there\’s still something you can create that others wish to buy.

Even if everyone else is better at doing everything better than you are, there\’s still a place in a trading economy for you, still something you can do that others will value and thus buy. That something being whatever it is that you are least bad at.

10 thoughts on “Err, no Ms. Orr, no”

  1. True, but it is worth noting that there is a weaker valid point, which is that for some (small) number of persons, their highest value production is below subsistence, a situation made particularly acute by the pragmatic need to pay taxes, rents etc. At the risk of invoking a manifestation of DBC Reed, the Ricardian subsistence level in England right now, sans benefits, is really quite exhorbitant.

  2. “the assumption that anyone with a skill can create something that others will want to buy.”

    Goods and SERVICES. One who can’t create something can drive the lorry to deliver it for those who can.

  3. s still something you can create that others wish to buy.”
    ‘mazing how even an economist can write that. The definition of a skill is you can create what others wish to buy. Past that, it’s just skill appropriateness. There are times when there’s zero need for economists & much need of road sweepers. Most of the time, probably.

  4. Right or wrong, the assumption Deborah makes is one that Deborah also believes; at least as far as when she (or her agent) negotiates with those that she writes for.

    Or does she really believe that she is unskilled and that anyone can do what she does?

  5. Ian B,

    Indeed. It’s the other side of the “why do poor girls get pregnant” problem (the education argument is laughable). We don’t just put people with children high on the council housing property list, we’ve also screwed with the incentives for them to work.

  6. So Much For Subtlety

    The idea that humans can build economies by trading rests on the assumption that anyone with a skill can create something that others will want to buy.

    I am seriously concerned about what Ms Orr assumes makes the economy go around. If this is not true, what is?

    We can build an economy on people without skills? That we can build an economy without trade at all? I think we should know.

  7. So Much For Subtlety

    Ian B – “True, but it is worth noting that there is a weaker valid point, which is that for some (small) number of persons, their highest value production is below subsistence”

    Yes but is the best solution to give them lots of money? Because to get to such a point, they usually have to work at it. What sort of person contributes nothing of value at all? I know a guy, a lovely guy, rural origins, not too bright, no education worth mentioning, not much in the way of ambition either, but a hard worker. And he has worked his whole life. Stacking shelves. Well the polite term is a wharehouseman, but that is basically what it is. Never had trouble finding or keeping work.

    But now his hips, knees and heart are giving out. A shame. Up to now I doubt he has contributed much in tax, but I bet he paid in more than he took out. That may change as he gets sicker, unless he passes this mortal coil quickly.

    What is to stop anyone contributing as much as this guy? All he has had to do all his life was turn up, work hard and obey the law. Which he did.

    And changing the subject completely, we used to have a solution for people who consumed a lot and produced nothing of value. It was called marriage. I suggest we try it once more.

  8. Oh heavens! I’ve just read a Guardian article from end to end.
    Where the hell do they get their facts from?
    Try this one:
    “A report from Prudential insurance around that time, surveying 1,000 households, found that 61% threw out at least one bag of prepared salad a week, without ever removing the packaging.”
    There’s 6 of us who’ve commented here. That implies 3-4 unopened packs of prepared salad hit the bin in the last 7 days. Did so in February, as well. Mind owning up you lot? Far as I can remember, I’ve probably only bought a dozen packets of prepared salad in my life. And all those got eaten.
    Where do they do these surveys?

  9. Ian B not only blathers away on his own account but has taken to stealing my act. And not a bad job he makes of it too, unfortunately. If I might just add something to support my own argument: disregarding theory (Ricardo’s theory relates principally to soil fertility), the observable commonplace fact is that no matter how well off you are, rents and house prices are going to leave the population in aggregate fairly skint on current if not capital accounts. So if your income goes up and house prices and rents do too you are still going to end up eating Value Beans. That being the case the Wonder of the Markets argument breaks down because the property market crowds out other markets. If everybody is so skint after paying taxes and “rents”, they are not going to stretch to anything else produced by people in their own country. What is more the Wonder of the Property Market bombed out the economies of the ex Communist Baltic states in short order (fifty years of Communist misery / capitalism did for them in less than ten), so all their well-trained workers (Socialism you see) have to come here to work, which they can do by dodging the property market.(Round here they were living in the woods).Markets are destructive, because they destroy each other.

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