A Note on Comparative Advantage: It Changes Frequently

Donald J. Boudreaux in this post:

Suppose that Jane started off her adult life as plain. She possessed neither unusual skills nor impressive learning. On the day that she turned 18 years old, her comparative advantage was as working as a motel maid, which she commenced to do.

On Jane’s 19th birthday she decided that she no longer wished to work as a motel maid, so she enrolled in college. After sixteen years of determined application of her mind and energies—and finances—Jane became a board-certified cardiovascular surgeon, boasting a medical degree from Harvard’s medical school.

Jane consciously strove to change her comparative advantage. And she succeeded. Her comparative advantage today no longer is found in cleaning bathrooms and changing bed linens; it is in treating people with cardiovascular illnesses. Obviously, her pay today is far higher than it was sixteen years earlier. But her becoming a cardiovascular surgeon caused other cardiovascular surgeons to earn less than they would have had Jane remained a motel maid.

Does anyone think that what Jane has done is unusual? Is there anyone who supposes that Jane’s successful effort to improve her skills violates some foundational assumptions or laws of economics? Would anyone claim that the theory that explains why the 18-year-old Jane found it advantageous to specialize at being a motel maid, and why motel owners found it advantageous to pay her to perform those maid services, cannot explain why the 35-year-old Jane finds it advantageous to specialize at being a cardiovascular surgeon, and why hospitals find it advantageous to pay her to perform those health-care services?

Of course not.

Further he argues even if governments intervene and create so called champions, principles of comparative advantage apply…


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