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Umm, rilly?

Debunking standard theory, she shows how economist David Ricardo’s theory of comparative advantage—the foundation on which the entire edifice of unfettered globalization was built—has been largely disproven.

Gosh, that’s interesting.

You don’t necessarily expect trenchant critiques of Wall Street and Big Tech from Financial Times columnists, but in the case of Rana Foroohar’s first two books, that’s exactly what you get.

So, FT columnist is ignorant of basic economics then. Which isn’t interesting as it’s not unusual.

24 thoughts on “Umm, rilly?”

  1. The mistake lies not in the criticisms of globalization but that ‘people’ can plan an alternative.

    If (and probably when) globalization in its current form runs into difficulties then alternatives will clamour for their place in the sun but they won’t be imposed from the top down.

  2. If we can dethrone the reign of Big Finance and Big Tech, what new worlds can we imagine?

    Many. Although, unless you like to Eat Ze Bugs, of course, all rather Dystopian and ….well… Poor.

  3. Jeremy Vine in Durham today, walking around market square like he owned the place. He was lucky I’d only had three cask ales by then and was in a jovial mood, otherwise I would’ve decked the cunt.

  4. You should read the comments. A bunch of moaning lefties. Even some of the commentators call that out. No defence of free markets. No defence of private property. A little questioning of the climate narrative but usually followed by denunciation of the climate heretic.

  5. Government can pick the winners and future winning technologies while micromanaging with gay abandon. Legislation, regulation. Red tape, instruction, advice, nudge nudge.

  6. Bloke in North Dorset

    “ Jesus Christ on a bike, how far the FT has fallen.”

    I don’t read either now, but from what I can make out nearly as far as the Economist and catching up fast.

  7. Could Ricardo envision sustainable trade deficits due to dollar printing?

    Does comparative advantage mean whoever can get, by hook or by crook, dollars has the advantage?

  8. No, that’s not what it means at all. What it does mean is that we are individually least badly off by doing what we’re least bad at. Further, society is better off collectively by us each doing what we’re least bad at.

    Now, a little request. From me, your host here. Please either actually engage with the discussions here or bugger off. I’ve long thought – for a couple of decades sort of long – that this blog, this comments section, is like a corner of a decent pub. And there always is a certain editing, socially, of those who become the pub bore. You are becoming that. So, just as would happen in a good pub – shape up or ship out and drink elsewhere. Thank you.

  9. OT: but I’ve just been on wiki for something else and seen this
    “The total live biomass on Earth is about 550–560 billion tonnes C,[1][5] and the total annual primary production of biomass is just over 100 billion tonnes C/yr.”
    So wealth (if biomass is wealth) is around 5.5 times annual GDP (if annual production of the biomass is taken as value add per year).
    Where have I seen that wealth to GDP ratio before?

  10. Rsm

    Been a long time since Tim had to ‘do a Murphy’ – in fact I can only recall one or two instances in 8 years (and TRUK has banned over 10,000 commentators in that time) – I’m not sure what your point is either – that we should have a single currency and world government responsible for allocating everything?

    Geoffers

    Based on the link there’s nothing I can see that debunks Ricardo whatsoever. Her argument seems to be ‘things would be much better if people like me were in charge’ in so far as I can discern it….

  11. If comparative advantage doesn’t work then the whole idea of trading . . . *anything* with other people is useless because you would be better off making it yourself at home rather than doing what you do best and trading your surplus with other specialists.

    The whole idea of specialization of *everything * – manufacturing, entertainments, ACADEMIA, goes out the window.

  12. “Jussi
    October 15, 2022 at 5:44 pm
    Government can pick the winners and future winning technologies while micromanaging with gay abandon. Legislation, regulation. Red tape, instruction, advice, nudge nudge”

    According to the comparative advantage doesn’t exist crowd the government can’t plan any better than anyone else. There’s no point to ‘experts’.

    They’ve come to the same conclusion we have, from the completely opposite direction.

  13. I wonder if any economist has analysed comparative advantage for governments.
    I mean the government of GB&NI could run our own energy generation companies or our railways but the governments of France and Germany respectively do a pretty decent job on our behalf via EDF and Grand Central etc. FRA and GER might also be better than GB&NI at running 50%+ of our own government via the EU as an intermediary, and while they might be better at this it’s by a very slim margin indeed, so the GB&NI will do that bit thanks.

  14. The theory of comparative advantage is a little bit counter intuitive but mathematically very simple indeed.
    We did quadrilateral equations when we were about eleven.

  15. “I wonder if any economist has analysed comparative advantage for governments.”

    I believe there’s one or two igNobels on the matter…
    Basically, you’re likely to be just as well off/efficient/correct putting a randomly chosen victim citizen in a given position than going through the whole rigmarole of expertise and carefully nurtured “networks”.

    Of course, being igNobels they can safely be …ignored.. 😉

  16. @Agammamom: No, specialisation is (usually) an example of absolute advantage. Comparative advantage would be where you can do better than the specialists, but hire them anyway so you can work at something more profitable instead.

  17. But you become a specialist to maximize what you do best.

    If there’s no comparative advantage then you can’t afford to specialize because you need to be able to do everything.

  18. Bongo,

    “I wonder if any economist has analysed comparative advantage for governments.”

    Interesting question. If there is such a thing, I think it’s mostly about national obsessions and where government interferes (or doesn’t).

    Like French museums are so much better than British ones. British museums have been ruined by being free and funded by central government, and so used for propaganda. They go scouring every record to find black people involved in something, even though the numbers are insignificant. French ones have a small charge, but I think they also get local funding, where the objective is about bringing visitors to towns, so they don’t mess with it.

    On the other hand, British retail is so much better than French retail, because no-one here is that bothered about protecting town centres.

  19. BoM4

    Plus British retail is often open during lunch, when many folk in other jobs can get away for a bit o shopping.

    Not so much in France.

    Plus of course a majority (?) of restaurants closing in august because it’s the holiday season….

  20. “who become the pub bore”

    RSM? More like the odd chap sitting in the corner muttering extracts from Das Kapital to himself and that people largely ignore but every now and again someone might pop over and try to help him stop spilling his pint?

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