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Wei_Dai comments on Comparative and absolute advantage in AI - Less Wrong Discussion

18 Post author: Stuart_Armstrong 16 July 2013 09:52AM

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Comment author: Wei_Dai 16 July 2013 09:23:44PM *  6 points [-]

There is no Pareto Optimal scenario that involves you making hamburgers or cat videos.

This makes sense, but made me confused about how the standard comparative advantage argument for trade, i.e., with two humans or two countries, works, and why it doesn't run into the same kind of conclusion. Turns out the confusion is justified. This 2007 paper, A New Construction of Ricardian Trade Theory, claims that all prior models of comparative advantage had the following problems:

On the contrary, the models so far analyzed had two crucial defects. (1) Inputs were restricted to labor as a unique factor and no material inputs were admitted. This implied that intermediate goods were excluded from any theoretical analysis of international trade. (2) Choice of techniques was not admitted. This is what is necessary when one wants to analyze technical change and development.

Comment author: oooo 21 July 2013 03:17:20AM 0 points [-]

I wish the paper was available to read. Do you have a copy available?

Comment author: Wei_Dai 21 July 2013 03:25:51AM 1 point [-]

It's usually available for free at the linked address, but apparently the server is down for maintenance. I didn't save a copy but the message says the system will be back on Monday.