First, comparative advantage tells you that some human labor will remain valuable in some configuration, but nothing about the wages, number of jobs, or the distribution of gains. You can have comparative advantage and still have massive displacement, wage collapse, and concentration of returns to capital.
Agree 100%. I think this quote is really all you need to rebut the standard economist “but comparative advantage!” argument.
Most economists have shockingly little to say about distribution of gains and market power—a lot of their models simply assume perfect competition, such that market power doesn’t exist. It seems to be an enormous blind spot
Would be interested in hearing more about your upcoming policy document, as I’ve been working on a policy paper myself that touches on some of the same issues you raise. Who is your paper pitched at?
Hi—I’m writing the policy proposal for another publication so I can’t share much yet, but it will be ready soon. I will read your document when you publish as well!
Agree 100%. I think this quote is really all you need to rebut the standard economist “but comparative advantage!” argument.
Most economists have shockingly little to say about distribution of gains and market power—a lot of their models simply assume perfect competition, such that market power doesn’t exist. It seems to be an enormous blind spot
Would be interested in hearing more about your upcoming policy document, as I’ve been working on a policy paper myself that touches on some of the same issues you raise. Who is your paper pitched at?
Hi—I’m writing the policy proposal for another publication so I can’t share much yet, but it will be ready soon. I will read your document when you publish as well!