On 9/7/07, sartesian <[EMAIL PROTECTED]> wrote: > But isn't this entire notion, "comparative advantage," derived as it is > from Smith's division of labor, simply baloney?
it's not _total_ baloney. And it's really from Ricardo more than Smith. It's basically the idea that two traders that have different resources can gain by exchanging with each other. Of course, it doesn't have to be organized by markets. It could be organized democratically instead, of example. Mostly, the theory is much too abstract to correspond to the real (empirical) world, which is structured by imperial domination. > Where is the specialization on a national basis in the world economy? > Anywhere? Textile production in Guatemala in India, in Mali, was > comparatively advantaged to textile production in the UK or Georgia > based on what? And is no longer advantaged when compared to China after > the expiration of the quota agreements? nowadays, more enlightened economists know about "dynamic comparative advantage." That is, a country like Japan can create its comparative advantage. Of course, the US did it too, developing behind tariff barriers between 1860 or so and 1945 or so. Instead of Ricardian comparative adv., econ-types talk about Heckscher-Ohlin models. But that doesn't change anything: a country can change its factor proportions (organic compositions of capital, etc.) to change the nature of its ideal specialization. > There is the historical movement, migration, transformation of capital > and labor that has everything to do with class and absolutely nothing to > do specialization, comparative advantages, or a natural sense of rhythm. migration of labor and capital have nothing to do with comp. adv. or H-O, since those theories assume mobility away (or do so in their most popular forms). A simple Ricardian story of comp. adv. can be jazzed up by asking what kind of gains can be created if people move from the country with the absolute disadvantage (Portugal) to the one with the absolute advantage (England) and then have their labor productivity rise to something similar to that prevailing in England. The "gains from migration" are larger than the gains from trade. -- Jim Devine / "We are what we repeatedly do. Excellence, then, is not an act, but a habit." -- Aristotle.
