[HN Gopher] The Metal Age of Thailand and Ricardo's Law of Compa...
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       The Metal Age of Thailand and Ricardo's Law of Comparative
       Advantage
        
       Author : benbreen
       Score  : 23 points
       Date   : 2021-08-10 05:10 UTC (2 days ago)
        
 (HTM) web link (www.sciencedirect.com)
 (TXT) w3m dump (www.sciencedirect.com)
        
       | robocat wrote:
       | > Ricardo's Law of Comparative Advantage
       | 
       | https://en.wikipedia.org/wiki/Comparative_advantage
       | 
       | Hours of work necessary to produce one unit:
       | Cloth  Wine         England   100    120         Portugal  90
       | 80
       | 
       | In the absence of trade, England requires 220 hours of work to
       | both produce and consume one unit each of cloth and wine while
       | Portugal requires 170 hours of work to produce and consume the
       | same quantities.
       | 
       | If each country specializes in the good for which it has a
       | comparative advantage, then the global production of both goods
       | increases. Countries can trade surpluses for shortfalls and be
       | better off overall.
        
         | CyanBird wrote:
         | Yeah, it works very, very well, the basis of modern
         | international trade networks
         | 
         | It sadly has externalities such as compounding benefits of
         | manufacturing, or the inherent nature of anarchism on
         | international relations which as the model of Joan Robinson
         | showcases it leads to lopsided effects on economic development
         | such as was the relationship of Portugal - England, or the de
         | industrialization of India for the benefit of having a hostage
         | market to British early phases of manufacturing
        
       | amin wrote:
       | I'm confused. What does this say in normal English?
        
         | sirn wrote:
         | In the old model of metal age, metals are developed by a
         | society that is hierarchical or militaristic (as development of
         | metal is a very complex process with specialized knowledge and
         | tooling). This old model cannot be applied to an archaeological
         | site in Thailand (Ban Chiang / Ban Non Wat / etc.) due to
         | evidences demonstrating absence of control over metal
         | production in the region.
         | 
         | The research paper suggested that the region developed its
         | metal age by trading rather than by any ruling entity, by
         | applying Ricardo's Law to the distribution of metal artifact in
         | the region.
        
         | foota wrote:
         | Different parts of the region specialized in one kind of metal
         | production and traded with the others for the other metals they
         | needed. They didn't have a single ruler but were each self
         | ruling.
        
           | amin wrote:
           | Thank you. I was familiar with Ricardo but didn't understand
           | the word spaghetti about metals in the article.
        
         | mdp2021 wrote:
         | Ricardo's law is the advantage of specialization. If A can
         | produce more value by producing X instead of Y, it is best to
         | produce the former and buy the latter - that efficiency in
         | production creates a possibly counter-intuitive extra for both
         | trading parties.
         | 
         | <<In this kind of economy, communities specialize in producing
         | certain goods in order to participate in the regional exchange
         | system [...] they see their efforts are better spent in
         | producing other products to exchange for desired goods made in
         | other villages or regions. [...] development of a regional
         | economic system rooted in exchange networks among communities
         | underpinned the peaceful heterarchical metal age socio-
         | political system that endured in Thailand for over two
         | millennia>>
        
       | xyzzyx wrote:
       | While some forms of comparative advantage might occur in the real
       | world, Ricardo's theory, like so much of economics, abstracts
       | away fundamental facts about the financial and biophysical
       | aspects of development to such an extent that I do not see it as
       | a useful tool of economic analysis. See for instance:
       | 
       | https://www.brookings.edu/research/diversification-or-specia...
       | 
       | https://atlas.cid.harvard.edu
       | 
       | https://americanaffairsjournal.org/2017/08/ricardos-vice-vir...
       | 
       | This in general seems like a good reason for realism over
       | empiricism within economics, many toy theories such as Ricardian
       | comparative advantage can be used to interpret real world data
       | and be assigned scientific credibility in the process, you have
       | to open up the black boxes at all levels of aggregation to get
       | beyond that.
        
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       (page generated 2021-08-12 23:02 UTC)