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Comparative Advantage

One who has a comparative advantage in producing a good or service can provide it at a lower opportunity cost than his or her competitors and earn profits from trade.

 

Mark Hendrickson - What about Walmart?

 

Art Carden - "Trade is Made of Win" Part 2: Cooperation (LearnLiberty)

Related Publications

ARCHIVE

Trade

JUNE 30, 2009 by KEIR KETEL

ARCHIVE

The Goal Is Freedom: Paul Krugman, Doctor of (Bad) Economics

JANUARY 04, 2008 by SHELDON RICHMAN

Paul Krugman, the New York Times op-ed writer, has a Ph.D. in economics. Those three magic letters give him an air of authority, as if they represent a valuable accomplishment, yet somehow he manages to consistently give bad economic advice in his twice-weekly column. Go figure. More . . .

ARCHIVE

The Goal Is Freedom: A Democracy of Dunces?

JUNE 01, 2007 by SHELDON RICHMAN

When pro-free-market critics of democracy explain why laissez faire is not a winning election issue, they usually say that voters have a no incentive to research economic policy because one vote won't sway the election and the expected payoff to any individual voter is infinitesimal. This "rational ignorance" leaves space for special interests to have their way, despite the fact that if the voters paid attention to what was going on, they wouldn't put up with it. That explanation leads to the conclusion that democracy does not work because outcomes diverge from what people really want. On the other hand, fans of democracy think that the rejection of laissez faire shows the system is working just fine. But both sides agree that voters are rational (employing reason) under the circumstances. Which story is true? Maybe neither. More . . .

ARCHIVE

The Goal Is Freedom: Economic Nationalism, Enemy of the People

NOVEMBER 17, 2006 by SHELDON RICHMAN

"With the 2006 election, America appears to have reached the tipping point on free trade. . . . Anxiety, and fear of jobs lost to India and China, seems a more powerful emotion than gratitude for the inexpensive goods at Wal-Mart. The bribe Corporate America has offered Working America -- a cornucopia of consumer goods in return for surrendering U.S. sovereignty, economic security and industrial primacy -- is being rejected." So writes conservative commentator Patrick J. Buchanan in his post-election analysis. Buchanan may be right. Free traders -- those who reject the bogus idea of a "national economy" -- should be nervous. More . . .

Related Freeman Articles

FEATURE

Fantasy Football, Opportunity Cost, and Comparative Advantage

NOVEMBER 07, 2012 by ISAAC M. MOREHOUSE

Don't let the "fantasy" in fantasy football fool you: The game illustrates some crucial points about opportunity costs and comparative advantage. Isaac Morehouse has been keeping score.

ARTICLE

How the Theory of Comparative Advantage Saved My Marriage

Economic Theory Has a Down-Home Value

NOVEMBER 01, 2000 by TED ROBERTS

ARTICLE

Comparative Advantage Continued

Free Trade Does Not Cause Massive Unemployment

NOVEMBER 01, 1999 by DWIGHT R. LEE

The concept of comparative advantage, which I began discussing last month, is a straightforward application of opportunity cost and is almost embarrassingly simple. Certainly people have no trouble understanding and recognizing the importance of this concept in their own personal lives.

ARTICLE

Comparative Advantage

Free Trade Benefits High-Paid U.S. Workers

OCTOBER 01, 1999 by DWIGHT R. LEE

Related Multimedia

MULTIMEDIA - VIDEO

Evening at FEE: Mad About Trade

MARCH 01, 2011

MULTIMEDIA - VIDEO

Free Trade

DECEMBER 14, 2010

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Heavily-armed police and their supporters will tell you they need all those armored trucks and heavy guns. It's a dangerous job, not least because Americans have so many guns. But the numbers just don't support these claims: Policing is safer than ever--and it's safer than a lot of common jobs by comparison. Daniel Bier has the analysis. Plus, Iain Murray and Wendy McElroy look at how the Feds are recruiting more and more Americans to do their policework for them.
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