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Politics : PRESIDENT GEORGE W. BUSH -- Ignore unavailable to you. Want to Upgrade?

To: Lizzie Tudor who wrote (537201)	2/8/2004 4:39:25 PM
From: JDN	Read Replies (1) \| Respond to of 769670

Surely you realize how smart Jack Welch is? jdn

To: Lizzie Tudor who wrote (537201)	2/8/2004 8:18:33 PM
From: Gus	Read Replies (1) \| Respond to of 769670

Try to be less shrill about the offshoring phenomenon by reviewing the history of economics. You only make yourself look trivial with that red meat populist screed. The Theory of Comparative Advantage - Overview Historical Overview The theory of COMPARATIVE ADVANTAGE is perhaps the most important concept in international trade theory. It is also one of the most commonly misunderstood principles. There is a popular story told amongst economists that once when an economics skeptic asked Paul Samuelson (a Nobel laureate in economics) to provide a meaningful and non-trivial result from the economics discipline, Samuelson quickly responded with, "comparative advantage." The sources of the misunderstandings are easy to identify. First, *<font color=red>the principle of COMPARATIVE ADVANTAGE is clearly counter-intuitive.</font> Many results from the formal model are contrary to simple logic. Secondly, the theory is easy to confuse with another notion about advantageous trade, known in trade theory as the theory of absolute advantage. <font color=red>The logic behind ABSOLUTE ADVANTAGE is quite intuitive.*</font> This confusion between these two concepts leads many people to think that they understand comparative advantage when in fact, what they understand, is absolute advantage. Finally, the theory of comparative advantage is all too often presented only in its mathematical form. Using numerical examples or diagrammatic representations are extremely useful in demonstrating the basic results and the deeper implications of the theory. However, it is also easy to see the results mathematically, without ever understanding the basic intuition of the theory...... internationalecon.com