"Comparative Advantage" has been called the only non-obvious concept in elementary economics. It's rather straightforward to describe: consider two people who have two jobs to accomplish. Even if one person is better at both tasks, if they're allowed to trade then the most efficient division of labor is for each to work at the task on which s/he is relatively better. (This holds true even without economies of scale or skill improvements due to specialization, which would make the advantages even greater.) Suppose we have to perform both gardening and video-game testing, and that you're twice as good as I am at gardening but three times better at gaming. Then (work out the math!) we are both better off by letting me do the garden full-time while you exclusively attack the joystick.
The idea of "comparative advantage" extends to larger situations involving whole nations — again, as long as trade between participants is allowed. And as I recently advised a young neighbor who's a college freshman, it's also a good thing to think about when choosing your Major. Other things being equal, pick the area where you have the greatest relative edge (or the least disadvantage) — even if it's hard for you. You'll do better in the long run, and (via higher global productivity) so will Society writ large.
Sunday, April 15, 2001 at 15:10:10 (EDT) = 2001-04-15
(correlates: WebGardening, JoyToStuffRatio, NewYorkNewYork, ...)