When one country, let's say for example
Beanland, wants to trade with another country, say
Riceland, they both are going to produce whatever they specialize in. Obviously
Beanland makes beans and
Riceland makes rice.
Clearly
Riceland is not going to produce beans.
Riceland has a comparative advantage in producing rice which in one hour it can produce 1000lbs of rice. While
Beanland has a comparative advantage in producing beans of which they can produce 100lbs in one hour.
Riceland's bean production capacity is not great, it can only produce about 10lbs in one hour.
Beanland coincidentally cannot produce rice at a very high rate either, about 100lbs in one hour.
Therefore if both
Riceland and
Beanland decide to engage in free trade then both will benefit.
Riceland can produce all of its rice and more while trading for beans.
Beanland can do the same with their beans.
Both nations are better off.
But what if a nation is bad at producing everything?
Usually they can still engage in free trade, their labor is cheaper than that of places like
Riceland and
Beanland who have a comparative advantage therefore they can sell their goods for less.
The rest of the world benefits from lower prices.
Consequently inexpensive labor usually means higher employment. Which is due to the fact that these places that have little to no skilled labor usually sift out the bad eggs from the good, and there are plenty of unskilled eggs out
there who flock to areas like this.
I happen to live in a city that is bad at producing everything.
Eugene, Oregon is a place full of bums (unskilled eggs). These men and women, who lack a warm place to sleep and mostly lack the sanity and/or skills to find a job to acquire an insulated environment for nightly dormant rest, are all over the place.
Most of them are also quite fond of crack.
This puts large holes in their pockets. Most of them meander not really bothering anyone but some see themselves as
possessing a skill in taking things to support themselves.
This morning I was on my way to school. When I walked into the garage I noticed something immediately that I thought was odd. There was a pile of broken glass next to my driver's side window.
Then of course I notice that the window was shattered.
The only thing that was taken from my car was my 160
gb iPod that I paid $395 for last year and is as of now discontinued.
I also spent something like 9,347 hours putting 18,043 songs on this device.
This included
tagging music, converting tons of it from
flac and
copying to no end.
But the worst thing about this theft was the way in which the intruder attempted to access my car.
Upon closer examination I noticed that around the broken window was three little dents.
It appeared that the thief had missed the window three times before achieving the desired blow that shattered it.
What kind of autistic retard can't land a solid blow when breaking a window that is 37" in width?
This troubled me, because I don't appreciate being robbed, but this person seems to lack the skill needed to break a window without denting the surrounding metal.
Eugene's labor market, even in unlawful removal of electronics from locked motor vehicles, still is worse than all other competing labor markets.
It is my contention that Eugene should outsource for all its criminal elements and resolve at least one aspect of its deteriorating economy.
-Monty
Edit: I'd like to thank Beni for offering his economic insight to help me clean up my logic in this article.
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