Tuesday, October 16, 2007

Out of Context, Issue 3 (or Who's Afraid of Comparative Advantage?)

"There are two technologies for producing automobiles in America. One is to manufacture them in Detroit, and the other is to grow them in Iowa. Everybody knows about the first technology; let me tell you about the second. First you plant seeds, which are the raw materials from which automobiles are constructed. You wait a few months until wheat appears. Then you harvest the wheat, load it onto ships, and sail the ships westward into the Pacific Ocean. After a few months, the ships reappear with Toyotas on them."

Landsburg, S. (1993). The Armchair Economist. As cited by Bryan Caplan in The 4 Boneheaded Biases of Stupid Voters, reasononline, October 2007.

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