I really like the idea of applying comparative advantage to dev management. I think it's generally a good idea, and something useful to keep in mind.
On the other hand, the original application of comparative advantage -- to economics -- is so widely misinterpreted that one can safely assume that anyone invoking it is probably wrong.
Ricardo's original example goes as follows. Assume England and Portugal are producing wool and wine. Portugal is more productive at both, but the difference is more pronounced in the case of wine. Then, under some circumstances, it can be better for Portugal to focus exclusively on wine, and this is the best outcome for both countries.
Many ECON-101 courses then jump to the conclusion that global trade is good for all involved.
It should be obvious for anyone having touched operations research or game theory that it depends (on the actual productivity numbers, on demand, on supply constraints, etc.), and that under some other circumstances England goes bankrupt.
The funny thing is that Ricardo fully realized that fact, and his example was an interesting paradox -- one that can be used to design effective trade rules.
(See the talks by Ralph Gomory on trade for how this misinterpretation affects us today.)
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[ 1.4 ms ] story [ 6.3 ms ] threadOn the other hand, the original application of comparative advantage -- to economics -- is so widely misinterpreted that one can safely assume that anyone invoking it is probably wrong.
Ricardo's original example goes as follows. Assume England and Portugal are producing wool and wine. Portugal is more productive at both, but the difference is more pronounced in the case of wine. Then, under some circumstances, it can be better for Portugal to focus exclusively on wine, and this is the best outcome for both countries.
Many ECON-101 courses then jump to the conclusion that global trade is good for all involved.
It should be obvious for anyone having touched operations research or game theory that it depends (on the actual productivity numbers, on demand, on supply constraints, etc.), and that under some other circumstances England goes bankrupt.
The funny thing is that Ricardo fully realized that fact, and his example was an interesting paradox -- one that can be used to design effective trade rules.
(See the talks by Ralph Gomory on trade for how this misinterpretation affects us today.)