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To: syriacus

The Law of Comparative Advantage held fast for centuries, and America would not have propsered if it hadn’t. But Ricardo based his argument on an assumed immobility of capital, and after technology removed those barriers, it needs to be re-considered. Most economists now think in terms of competitive advantage rather than comparative advantage, which for example means, the US competetes through increased productivity and innovation rather than cost by encouraging Asia to produce the world’s supply of microchips but having firms in the US who are the best at applying them to create high=value solutions. Apple would be an example of this, where the company creates much greater value for it’s shareholders by outsourcing non-core activities like electronic assembly.

What Trump calls “smart trade” provides an incentive for companies like Apple to outsource that work to US companies at a competitive price.


42 posted on 03/05/2016 9:03:19 AM PST by bigbob ("Victorious warriors win first and then go to war" Sun Tzu.)
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To: bigbob
I worry that Trump's heavy hands will replace the invisible hand, (to our disadvantage).

He's had all sorts of failed businesses.

Trump is a wheeler-dealer.

It's OUR money and lives he will be gambling.

Someone who uses so many superlatives seems more than a little out of touch with reality.

Who will be his economic advisors?

58 posted on 03/05/2016 10:57:22 AM PST by syriacus
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