Comparative advantage

The act of an object

Collection

zero Useful+1

zero

Comparative advantage, the main body is innate factor endowment Or learning and innovation of the day after tomorrow added value Of Comparative advantage , including relative competitive edge And relative cooperation advantages.

Chinese name: Comparative advantage
Foreign name: Comparative advantage

Nature: The act of an object
Assumptions: Only two countries and two commodities
Development background: 1815 britain government

catalog

seven defect
eight principle

definition

Announce

edit

market subject Can bring Market share The increase of cooperation opportunities, cost reduction and profit margin Improvement. With the development of society Economic growth mode The transformation of factor endowment The comparative advantage formed will gradually weaken, and its role and status will gradually decline; Higher formation through learning and innovation added value Its comparative advantage will be gradually strengthened, and its role and position will gradually increase. In the era of smart economy, the comparative advantage of higher added value formed by learning and innovation will become the dominant comparative advantage. Developing countries should form comparative advantages with higher added value through independent innovation, and transform comparative advantages into competitive edge With the advantages of cooperation, we can come from behind and achieve transcendental development.^[1]

interpretation

Announce

edit

Comparative advantage refers to the behavior that one producer produces a good at a lower opportunity cost than another producer.^[2] If a country produces a product in its own country opportunity cost If it is lower than the opportunity cost of producing the product in other countries (measured by other products), the country has a comparative advantage in producing the product. It can also be said that when a producer produces products at a lower opportunity cost than another producer, we say that the producer has a comparative advantage in such products and services.

General meaning of words

Announce

edit

When it comes to comparative advantage, we have to mention a concept corresponding to it, absolute advantage （Absolute advantage）。 The latter is easy to understand. You are better at managing money than I am. You have an absolute advantage over me in managing money. China's color TV manufacturing technology ratio Vietnam? Strong, China has an absolute advantage over Vietnam in color TV manufacturing. Do absolute advantages and disadvantages determine the division of labor between people or trade relations between countries? At first glance, this seems logical. You are better at managing money than I am, of course, in our two person team You come conduct financial transactions. China is better at producing color TV sets than Vietnam. Of course, China exports color TV sets to Vietnam. But on second thought, this reasoning is not tenable. Your financial management 1 point better than me, but 2 points better than me in promoting products. Who will manage money and market in our team? The answer is: for the overall interests of the team, you can only bear to part with it and will Account book Leave it to me. You are better at managing money than I am, but you are better at promoting products. Give me the account book to make time for you to do marketing. In our team, your comparative advantage is marketing, while my comparative advantage is financing. Our relationship of division of labor and cooperation is based on comparative advantages rather than absolute advantages. Why is that? Because your time and energy are limited. Although you are better at everything than me, you can't do everything by yourself. Of course, you can choose to do everything yourself, but then you will get less income than your share of cooperation with me. Similarly, although China has an absolute advantage over Vietnam in color TV production Comparative advantage Larger. Therefore, in the Sino Vietnamese trade, China will export computers to Vietnam, and Vietnam will export color TV sets to China ①. The trade relationship between the two countries is based on comparative advantage rather than absolute advantage. The concept of comparative advantage tells us that for a country or individual that is strong in all aspects, the smart way is not to rely on strength, attack from all directions, show off or do everything by hand, but to spend limited time, energy and resources on what they are best at. On the contrary, a country or individual who is in a weak position in all aspects need not complain about their own inherent shortcomings. You should know that the resources of the "strong" are also limited. For its own benefit, the "strong" must set aside space for the "weak". Comparative advantage theory The essence of“ I am born in heaven and I must be useful ”。

In a word, it is all Production unit The difference in the possession, distribution and utilization of resources has resulted in the production of comparative advantage. The difference in comparative advantage directly leads to the specialization of production goods (the so-called“ Social division of labor ”）And the emergence of trade. The result of this specialization is that when everyone can specialize in what they are best at, production will become more efficient, so that the whole society can create Material wealth Total amount and its whole Economic welfare Will increase. Professional total output Increment is the benefit of trade. Then, the conduct of trade becomes logical. At the same time, more shareable total output itself also promotes the development of professional decision-making.

Assumptions

Announce

edit

Comparative advantage

(1) Assume that there are only two countries and two kinds of goods (X and Y goods) in the trade. The purpose of this assumption is to use a two-dimensional plan To illustrate this theory.

(2) Both countries use the same technology in production. That is, if the factor prices are the same between the two countries, the two countries will use the same amount of labor when producing the same commodity. because Factor price Usually different, so producers in different countries will use more low price factors to reduce production costs 。

(3) The model only assumes that Barter It is carried out under conditions without considering complex Commodity circulation , and it is assumed that one unit of product X is equivalent to one unit of product Y (although their production costs are different).

(4) In both countries, the commodity and Factor market Are completely competitive.

(5) In a country, elements can free flow , but it does not flow internationally.

(6) The production cost remains unchanged before and after division of labor.

(7) Not considered transaction cost and Transportation expenses There are no tariffs or other barriers that affect the free conduct of international trade. However, in the presence of trade, when the relative commodity price When they are completely equal, the division of production between the two countries will stop the theory of comparative advantage. If present transportation cost And tariffs Relative price When the difference is less than the tariff and transportation cost per unit of trade goods, the division of production between the two countries will stop.

（8） Law of value Fully implemented in the market, free competition, free trade 。

(9) Assumptions international economy In a static state, there will be no other changes affecting the division of labor and the economy.

(10) The resources of both countries have been fully utilized, and there are no unused resources and elements.

(11) The trade between the two countries is balanced, that is, overall Import volume Equal to total Exports 。

Development background

Announce

edit

Some challenges

Comparative advantage

Because the two countries just have different commodity production Of absolute advantage Is extremely accidental, Smith Of Absolute advantage theory Some challenges remain. In 1815, the British government revised and implemented the“ Cereal law ”。 After the promulgation of the Grain Law, britain The rise in grain prices and land rent has benefited the landlords and nobles, and seriously damaged the industry bourgeois class Interests. Expensive grain makes workers money wages Forced increase, cost increase and profit decrease have weakened the competitive power ； At the same time, expensive grains have also increased the food expenditure of all walks of life in Britain, while reducing the consumption of industrial products. The "Grain Act" also led foreign countries to prevent the export of British industrial products to them with high tariffs. In order to repeal the Grain Law, Industrial bourgeoisie Various means have been taken to advocate grain free trade Benefits. The landlord aristocracy did everything possible to uphold the "grain law", believing that since Britain could produce its own grain, it did not need to import from abroad at all, and opposed free trade in grain.

To find the theoretical basis for free grain trade

At this time, Industrial bourgeoisie There is an urgent need to find grain free trade Theoretical basis. Ricardo came out at the right time. He published the《 Political Economics and Tax Principles 》, proposed the famous Principle of comparative advantage （Law of Comparative Advantage）。 This is the most important and unchallenged general principle of economics, with strong practical value and economic explanatory power. He believes that Britain not only imports food from foreign countries, but also imports a large amount of food, because Britain's share in textile production Odds ratio It still has great advantages in grain production. Therefore, Britain should specialize in textile production, trade its exports for food, and obtain Comparative advantage And increase the number of goods produced.

Comparative advantage theory It is developed on the basis of absolute cost theory. According to the principle of comparative advantage, one country is absolutely inferior to the other in the production of two kinds of goods. However, as long as the inferior countries have different degrees of inferiority in the production of two kinds of goods, and the superior countries have different degrees of superiority in the production of two kinds of goods, the inferior countries have comparative advantages in the production of less inferior goods, Countries with advantages have comparative advantages in terms of commodity production with greater advantages. The two countries specialize in the production and export of goods with comparative advantages, and import goods with Comparative disadvantage Both countries can benefit from trade. This is it. Principle of comparative advantage 。 That is to say, the two countries participate in international trade according to their comparative advantages, and both countries can improve by "taking the most important advantage from the two and taking the least harm from the two" Welfare level 。

Principle of comparative advantage

In fact, China's Tian Ji Horse racing stories also reflect this Principle of comparative advantage 。 The quality of the upper, middle and lower batches of horses represented by Tian Ji is inferior to that of the king of Qi at each level. However, Tian Ji dismounted the horse with no advantage and mounted the horse with complete advantage over the king of Qi Relative comparative advantage The result was a steady win when the king of Qi was attacked and dismounted.

Comparative cost theory It has played a progressive role in history. It is Free trade policy It provided a theoretical basis and promoted the capital accumulation And the development of productivity. Under the influence of this theory, the "Grain Law" was abolished. This was the greatest victory of Britain's free trade policy in the 19th century.

Practical test Results for

It also provides strong evidence for this theory. For example, McDowell took 1937 as an example to examine the export performance and labour productivity The relationship between them can basically be verified: for the industries whose labor productivity in the United States (adjusted according to the wage difference) is relatively higher than that in the United Kingdom, the exports of the United States in these industries are also relatively higher than those of the United Kingdom. Stern compared the relationship between labor productivity and export performance in the United States and Britain in 1950 and 1959. According to their analysis, 33 of the 39 sectors observed in 1950 supported hypothesis test However, by 1959, this relationship had weakened.

beyond doubt;indisputability

On the whole, Comparative cost theory Its role in accelerating social and economic development is beyond doubt. His greatest contribution to the theory of international trade is free trade Provide strong evidence and labour productivity The perspective of difference successfully explains an important cause of international trade. Until now, this theory is still used in many countries, especially developing country formulate Foreign economic relations and trade The theoretical basis of the strategy.

However, the comparative advantage also has great shortcomings. First, the analysis method of comparative cost theory belongs to static analysis 。

The theory holds that the world is eternal

Is a Static equilibrium Our world is a world where the interests of countries and economic groups are in harmony. Ricardo put forward nine assumptions as the preconditions of his exposition: first, only two countries and two kinds of goods are considered; Second, adhere to Labor axiology , the difference between the real labor costs of Britain and Portugal is established Comparative cost theory Assume that all labor is homogeneous; Third, production is carried out at the same cost; Four is no Transportation expenses ； Fifth, including labor production factors They are fully employed. They are fully mobile domestically, but not internationally; Six is Factor market and commodity market It is a completely competitive market; Seven is income distribution No change; 8. Trade is based on goods Barter By means of; Nine is nonexistence technical progress And economic development, international economy It is static. Secondly, Ricardo explained how the differences in labor productivity caused international trade, but did not further explain the reasons for the differences in labor productivity among countries. Third, an important conclusion of the theory is that: Principle of comparative advantage , will carry out completely specialized production. In reality, it is difficult to find a country to carry out fully specialized production in international trade. Generally speaking, most countries will produce import Alternative products.

Scope of application

Announce

edit

The principle of comparative advantage was originally International Trade The important concept in the is widely used in the comparison of various competition and cooperation, not only in the trade between enterprises and other aspects. For example, urban Functional positioning , international economic cooperation, ability comparison among job seekers Development capacity Compare, wait, any Possible Both comparison and difference can be used Principle of comparative advantage 。

defect

Announce

edit

Comparative advantage theory There is also a theoretical "hard injury", or there is theoretical analysis The "dead corner" on the. This is because, in Ricardo's theoretical analysis, the comparative advantage can be established completely depending on the two commodities between the two countries production costs Compare the difference of "degree". However, if we only study the highly abstract "2 × 2 trade model", there will be a situation that there is no "degree" difference in the comparison of the production costs of two commodities between the two countries. The following table shows the "Equal Advantage or Equal Disadvantage Model".

principle

Announce

edit

Comparative advantage theory (Theory of Comparative Advantage) can be expressed as: everyone consumes their own country and Countries in the world The goods or services produced by many other people. A person who can produce the goods with less input is said to have an absolute advantage in producing the goods opportunity cost Smaller people are called as having comparative advantage, while the benefits of trade are based on comparative advantage rather than absolute advantage. Trade can make everyone's situation better, because it allows people to specialize in their own activities with comparative advantage, but this principle is not only applicable to individuals. Between the two countries, labour productivity The gap of is not equal in any commodity. For at absolute advantage Countries should concentrate on the production of goods with greater advantages, while countries with absolute disadvantages should concentrate on the production of goods with less disadvantages, and then exchange with each other through international trade to save labor and gain benefits.

Novice on the road

Growth task Getting Started with Editing Edit Rule Edit by myself

I have questions

Content query Online Service Official post bar Feedback

Complaints and suggestions

Report bad information Failed to appeal through entries Complaint of infringement information Blocking query and unblocking

Jinggong Network Anbei No. 1100000200001