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by Nasrudith
2915 days ago
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That isn't what comparative advantage is - it is a recognition fo opportunity costs. If you have one country that can grow wheat and cotton better than their northern neighbor who can just grow wheat with lesser yield per acre it would make sense to get as much cotton as they need in the south and trade with the north for wheat because suitable acres not spent growing cotton are a loss in comparison. I know my teaching of the industrial revolution emphasized that things were dirty, nasty, and brutal. There was exploitation of the desperate masses but it was still sadly a better alternative than being killed in a pogrom or starving to death in a famine and eventually after many lives were lost reform arose to shift the balance. While the sort of scamming and defacto debt slavery are unacceptable - they were also unfortunately precedented, especially when desperate people are involved and it become less worth asking 'is it a scam' first. Industrialization is a morally messy process on many levels with no comfortable answers let alone easy ones. Take something like child labor for instance - clearly it is better off to have kids learning and preparing for the coming next stage of the economy instead of toiling or risking injury. However banning it and enforcing it too early perversely leads to increased child prostitution (no pun intended for such a somber subject matter) as they still need money to survive. |
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You're describing absolute advantage, not comparative advantage. Even if country A is worse at growing wheat than country B, it can still gain by specializing in exporting wheat to country B... so long as it's even worse at making other goods.