Thursday, October 26, 2006

I think I may *finally* understand Comparative Advantage

As Tim Worstall points out, the principle of comparative advantage may well be the only non-obvious, non-trivial result in the social sciences.

The idea is easy to state: even if you are better than somebody else at everything, it may still be beneficial to trade with them. The reason why is explained here.

Café Hayek continues to be on the first blogs I turn to in my newsreader each day and Don Boudreaux has an enviable talent for rendering economic arguments in ways that one can readily understand.

2 comments:

Ben said...

Aha, it's linear programming for economists!

Richard Brown said...

:-)