Carnival Of The Capitalists For The Week Of 01/12/2004 Is Up!!

The Carnival of the Capitalists for the week is up over at Ensight. The primary post is located here. Next week’s Carnival will be hosted by Unpersons. For submissions to next week’s carnival send an entry to capitalists -at- elhide.com.

There are several good entries, but the one that most caught my eye is by Cap’n Arbyte. Apparently Paul Craig Roberts, whom I despise (see here and here) is taking on David Ricardo, whom Milton Friedman has named the best economist in history, and doing it badly. Roberts is arguing that because the factors of production are more mobile, the doctrine of comparative advantage has been superseded. Hogwash. It’s just another excuse for protectionism and an attempt to create static markets. Here’s the Cap’n:

A world without comparative advantage is a fantasy. Even if all physical capital were fully and costlessly mobile, natural and unavoidable differences between people create comparative advantage. The young have a comparative advantage over the old in the performance of physical tasks due to their physical vigor. Adults have a comparative advantage over children in the performance of intellectual tasks due to their greater knowledge and experience. Even among adults, specialization along lines of study must occur because it is impossible for any single individual to learn the entire corpus of human knowledge. Specialization creates comparative advantage and therefore an incentive to trade.

The Cap’n goes on the blogroll because we have a common enemy and he handles Roberts well.

Reading the Cap’n’s entry it occurred to me that Roberts is not only taking on David Ricardo but also Adam Smith as well. Comparative advantage is really just the division of labor writ large — nations instead of individuals. Every time Paul Craig Roberts publishes my esteem for him is diminished, though it could hardly go any lower.

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