Beyond Belief - Clive Crook - The Atlantic - 0 views
www.theatlantic.com/...306172
globalization comparative advantage political economy economics atlantic
shared by Kay Bradley on 24 Sep 12
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name a single proposition in all social science that was both true and nontrivial. It took a while, but Samuelson finally thought of a good answer: the principle of comparative advantage
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The doctrine in question, devised by David Ricardo in 1817, makes a strong claim about the gains that accrue from trade.
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For nearly 200 years, the principle of comparative advantage, and the ideas about economic policy that flowed from it, divided the world into two camps: those with basic economic literacy, and the rest.
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Understanding this idea, and advocating it to the world, was part of what it meant to be an economist—especially an American economist.
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ately things have changed. Some of America’s most eminent economists, including Samuelson himself, have edged away from that earlier consensus.
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The shift is both momentous and disturbing. Just why it happened is a mystery.
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what the principle of comparative advantage does not say.
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trade between two countries will make both better off so long as each is especially good at making something different from the other
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absolute advantage
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there are mutual gains from trade even when one country is better at producing everything. All that matters is that its margin of superior efficiency is greater for some products than for others.
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comparative advantage
