The great thinker, Adam Smith (“Mr. Chips”) posited that, if every nation produced the products and services that it was best or better suited to, laissez-faire trade via the “Invisible Hand” ultimately would lead to a boon for world citizenry. He termed this economic coup, “Comparative Advantage (“CA”),” which allows one nation-state, dependent on a set of limited resources, whether those resources are comprised of natural, capital, or human resources, to economically take advantage of those assets.
The crux of the theory of CA is that, if the individual focuses on specializing on what he or she is best at, the aggregate effect of the national and international production of the “best of the best” will lead to consumption of the best goods and services by individuals and, aggregately, nation-states. Mr. Chips concluded that natural market forces prevail over time - the demand for better goods and services increasing on an international scale fueled by the innate human desire for creating and consuming and gravitating toward the best products.
Poor Mr. Chips, I wish he was here today. I think he would be very upset at the creative industry of Madison Avenue for helping to fashion artificial, en masse demand for inferior products; seemingly illogical, en masse desire for profit (i.e. capital accretion resulting in spiritual stagnation) prevailing over the desire to create and provide a better product at the same price – that is – ultimately, value migration coupled with wealth concentration and consumption of the best products by a greedy few.
Very interesting to note, as Patrick and Brent pointed out to me, are that the last words of the Father of Capitalism, are completely ignored by those whose grand ethos has become a mantra-like imperative: “PENETRATE THE MARKET.” Mr. Chips concluded in the last chapter of his last book that specialization on the individual level would lead to spiritual demoralization and antipathy for the end-product of the INDIVIDUAL’S endeavor. In other words, hit the nail on the head over and over again, and we will all be bored out of our minds - our innate creativity wasted for someone else’s desire for a few extra bucks. Well?
Another great thinker, the Frenchman, Bastiat, wrote economic “theory” in the mid-nineteenth century. He concluded that the wealth of a nation is not in the capital resources at its disposal but in the quality and quantity of the goods that its citizenry consumes. That idea may be plausible.
In other words, individuals within the United States are aggregately producing more (reflected by both unemployment rates and productivity assessments) but also consuming more (reflected by our increasing trade deficit and relatively low-priced foreign goods - despite oil prices). Notwithstanding the fact that Eurodollars are swimming overseas on an increasing basis, it would seem that Bastiat is correct – that the wealth of nations can be measured by the quantity and quality of goods consumed by that nation’s citizenry.
The crux of the theory of CA is that, if the individual focuses on specializing on what he or she is best at, the aggregate effect of the national and international production of the “best of the best” will lead to consumption of the best goods and services by individuals and, aggregately, nation-states. Mr. Chips concluded that natural market forces prevail over time - the demand for better goods and services increasing on an international scale fueled by the innate human desire for creating and consuming and gravitating toward the best products.
Poor Mr. Chips, I wish he was here today. I think he would be very upset at the creative industry of Madison Avenue for helping to fashion artificial, en masse demand for inferior products; seemingly illogical, en masse desire for profit (i.e. capital accretion resulting in spiritual stagnation) prevailing over the desire to create and provide a better product at the same price – that is – ultimately, value migration coupled with wealth concentration and consumption of the best products by a greedy few.
Very interesting to note, as Patrick and Brent pointed out to me, are that the last words of the Father of Capitalism, are completely ignored by those whose grand ethos has become a mantra-like imperative: “PENETRATE THE MARKET.” Mr. Chips concluded in the last chapter of his last book that specialization on the individual level would lead to spiritual demoralization and antipathy for the end-product of the INDIVIDUAL’S endeavor. In other words, hit the nail on the head over and over again, and we will all be bored out of our minds - our innate creativity wasted for someone else’s desire for a few extra bucks. Well?
Another great thinker, the Frenchman, Bastiat, wrote economic “theory” in the mid-nineteenth century. He concluded that the wealth of a nation is not in the capital resources at its disposal but in the quality and quantity of the goods that its citizenry consumes. That idea may be plausible.
In other words, individuals within the United States are aggregately producing more (reflected by both unemployment rates and productivity assessments) but also consuming more (reflected by our increasing trade deficit and relatively low-priced foreign goods - despite oil prices). Notwithstanding the fact that Eurodollars are swimming overseas on an increasing basis, it would seem that Bastiat is correct – that the wealth of nations can be measured by the quantity and quality of goods consumed by that nation’s citizenry.
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