Thursday, September 23, 2004

This isn't news to me, but others seem unaware of it

From An Open Letter To Advocates of International Free Trade, by Richard C. B. Johnsson, Ph.D.
One of the most characteristic features of today's society is the division of labor and specialization. But although the merits of division of labor are widely acknowledged, with it follows a perceived implication of great importance; if the person who is best at extracting teeth becomes a dentist and the best woodworker a carpenter, the conclusion is that those who aren't best at anything will end up outside society. And it is, after all, a fact that the lives of many people in today's society have ended in poverty and misery, while others live well, and that many have lost out in the competition. We do live in a Darwinist society of the survival of the fittest, with advanced division of labor. From this, two common standpoints would seem to follow; either you end up believing that the division of labor is a moral outrage, despite its efficiency, or you end up believing that because the division of labor is so efficient, and because so many benefit so much from it, the idea of some people being pushed outside society is somehow acceptable - some kind of welfare system and taxation will supposedly take care of those problems. Despite the apparent popularity of these two views, there is nevertheless no need to hold either of them. Instead, it seems possible to defend the merits of division of labor while discarding the idea of a society where only the fittest survive. In fact, this is one of the main points the message tries to communicate to you. Please bear with me a little longer.

According to the famous Ricardian principle, the international division of labor is made according to comparative advantages. But this also holds for the division of labor at all other levels of society. In fact, all trade, international as well as domestic, stems from the same source - the comparative advantage of the individual. Almost all of us specialize in the area that we are best in relative to others. There will almost always be someone who could potentially perform a task better than you. Even if you are the very best in an absolute sense, you will have had to rely on your comparative advantage to get there. The dentist thus finds it worthwhile to cooperate with the carpenter even though he might potentially be a better carpenter, and so on. The comparative advantage of the individual then lends itself to groups of people, companies, regions and countries. The comparative advantages could thus be seen as the glue of society. It is these that make it worthwhile for people to cooperate on any larger scale at all. They guarantee that there will be room for everybody. The division of labor according to the principle of comparative advantages could hence be considered the ultimate form of cooperation among humans.

Diversity must be respected as a fact of nature. The moral imperitive is to develop one's gifts as fully as possible and trade them.

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