craschworks

Peter Gallagher explains how to explain comparative advantage so that a journalist understands it.

I usually use…the story about the busy lawyer and her secretary. The $200/hour lawyer types faster and more accurately than her $25/hour secretary. When the pressure is on, she sometimes wonders if she should persist with her secretary or do the work herself.

In all my work with students, business people and even journalists in Australia and in my work for the UN in two dozen countries, I've never met anyone who didn't get the point of that story.

…The problem, I find, is that many people assume the idea doesn't scale. They are afraid to apply the same analysis to global exchange.

If you say: “Now, suppose we are talking about a deal between a rich country and a poor country; do you think that the same rule applies?”… they frequently get cold feet. Suddenly, imports become a threat and (bizzarely) exports become the purpose of trade.