Keith:
The practice of comparative advantage is carried out more widely and more
precisely than ever before. Most finished goods are products of several
different material sources and/or operations. Most international trade these
days consists of resources and part-goods cris-crossing the world before final
assembly.
Me:
I think that in today's world we need a more up-to-date understanding of
"comparative advantage", one which incorporates the question of advantage to
whom. I have a little book on my shelves entitled "The True Cost of Low
Prices: The Violence of Globalization" by Vincent Gallagher, who was a
researcher for various international agencies. It doesn't deny that countries
that produce goods for Walmart or components for Microsoft have a comparative
advantage, but points out that many of the people who do the work in those
countries are often close to being slave labour and are sometimes slave labour
in fact. We tend to see low wage costs as being advantageous, but tend to omit
the thought that they may be advantegeous to us but not necessarily to the
workers who make things for us.
Ed
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