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A True but Nonobvious Proposition: New at Reason

The great mathematician Stanislaw Ulam challenged the great Economist Paul Samuelson to name a principle in the social sciences that was both true and nonobvious. Samuelson thought for a bit, then replied, "Ricardo's theory of Comparative Advantage."

"That this idea is logically true," he said, "need not be argued before a mathematician; that it is not trivial is attested by the thousands of important and intelligent men who have never been able to grasp the doctrine for themselves or to believe it after it was explained to them."

You can make the argument for comparative advantage seem highly nontrivial and devilishly hard to believe after it is explained to you by following the great English economist David Ricardo into arithmetic and clotted prose. Ricardo wrote in 1817 that "England exported cloth [to Portugal] in exchange for Wine because, by so doing, her industry was rendered more productive to her; she had more cloth and wine than if she had manufactured both for herself; and…the industry of Portugal could be more beneficially employed for both countries in producing wine." If you can instantly grasp that logic (and go on believing it for practical purposes such as opposing Donald Trump's view of foreign trade) you are either already an economist or have an astonishing natural ability for the subject, writes Deidre McCloskey in the newest print edition of Reason.

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This post first appeared on FREEDOM BUNKER: The Best Libertarian News And Chat, please read the originial post: here

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A True but Nonobvious Proposition: New at Reason

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