...can I go and live where the economists live? It must be a Better Place.
I like Brad DeLong. I really do. But, this is "grasping reality with both hands"?
You see, trade balances. What we buy equals what we sell, in value. What we buy and what we sell can be goods, services, or property, but it balances. If we have a comparative advantage in nothing — and export nothing — then we necessarily have a comparative disadvantage in nothing — and import nothing. Trade is thus an opportunity for us to move workers out of occupations where we are least and into occupations where we are most productive.
Now, don't get me wrong. I'm a believer. I'm sure that, eventually, trade does balance. Moments — like now — where it does not are imperceptible flashes beneath the serenity of the stars. Just a comma, you might say.
But, you know, a nanosecond in the eyes of God is long enough for many of the former comparative advantages of a few little countries to, you know, disappear.
"Balderdash!", the economists will tell you, from their better place. Comparative advantage can never disappear. That is what the weasel-word "comparative" is about. Look on the bright side! If you are comatose and drooling, you have a real opportunity-cost advantage! Your comparative advantage as a human paper-weight is unassailable!
When the "comparative advantage" of the places in the world accustomed to considering themselves wealthy, enlightened, and civilized shifts from inventing stuff and building airplanes to the supply of migrant labor, back-office services, and environmentally costly natural resources, we will thank the economists for their foresightedness. For they are already in a better place, and as it is written, in the long run, we are all dead.
- 3-Apr-2007, 2:32 p.m. EDT: Changed an ungrammatical "much" to "many".
|interfluidity — Monday April 2, 2007 at 12:28pm||permalink|