Correct. If and when wages rise overseas (and they will at some point) the
comparative advantage may swing back to the U.S. again for some products.
The weak dollar is having this effect. Watch the G7 meeting this weekend.
The EU and Canada are upset that the weaker dollar is eroding their
comparative advantage. They rely on selling goods to the U.S. and on U.S.
tourists. It hurts when one loses one's comparative advantage. One needs to
adapt.
----- Original Message -----
From: <jon@dakota-truck.net>
To: <dakota-truck-moderator@bent.twistedbits.net>
Sent: Friday, February 08, 2008 1:48 PM
Subject: Re: DML: Re:
>
> "Tom Byrne" <kerib@ptd.net> wrote:
>> 3) Ever here of "Comparative Advantage"? Comparative Advantage (David
>> Cordero) states that, although countries can make a variety of goods and
>> services, it is more efficient for them to only make what they can make
>> most
>> efficiently and trade those goods and services for others. If Korea and
>> China can make TVs fore cost effectively and the U.S. is better at
>> commercial jets, each country should do so and trade for each others
>> products. Business should go where it can be done most cost-effectively.
>
>> This happens in the U.S. as well. More vehicles are built in the
>> South
>> than in the Midwest now. Why? It is cheaper to do so. Have auto
>> manufacturers taken advantage of Southern workers? No, their income is
>> now
>> higher than before the auto manufacturing jobs went south.
>
>
> Yep, it happens on an individual basis also. Most people don't make
> everything they use anymore. We pay other people to grow our food and
> sew our clothes. This gives us more time to specialize and do
> whatever it is we do best. This is a much more efficient system than
> making everything ourselves. It results in a better end product at a
> cheaper price and frees up a lot of time for other activities such as
> leisure. Its that same basic idea, scaled to a global level.
>
> --
> -Jon-
>
> .- Jon Steiger -- jon@dakota-truck.net or jon@jonsteiger.com -.
> | '96 Kolb Firefly, '96 Suzuki Intruder, Miscellaneous Mopars |
> `-------------------------------- http://www.jonsteiger.com --'
>
>
>
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