Sherrinford

This post discusses what statements about comparative advantage say and what they do not say, and why comparative advantage does not save horses from getting sent to glue factories. It is only marginally about AI. Eliezer Yudkowsky, in "The Sun is big, but superintelligences will not spare Earth a little sunlight", explains Ricardo's Law of Comparative Advantage and then writes: > Ricardo's Law doesn't say, "Horses won't get sent to glue factories after cars roll out." > > Ricardo's Law doesn't say (alas!) that -- when Europe encounters a new continent -- Europe can become selfishly wealthier by peacefully trading with the Native Americans, and leaving them their land. > > Their labor wasn't necessarily more profitable than the land they lived on. > > Comparative Advantage doesn't imply that Earth can produce more with $77 of sunlight, than a superintelligence can produce with $77 of sunlight, in goods and services valued by superintelligences. It would actually be rather odd if this were the case! These (negative) statements are true, but they may also create confusion. Why? Because they suggest something unclear or wrong about what Ricardo's insight does and does not apply to - i.e., what comparative advantage is about. Eliezer presents a standard example of comparative advantage, two countries trading, and he says that "Ricardo's Law of Comparative Advantage, ... shows that even if the country of Freedonia is more productive in every way than the country of Sylvania, both countries still benefit from trading with each other." But what does this require? It is useful to consider Ricardo's example. It starts from a situation in which, in "the absence of trade, England requires 220 hours of work to both produce and consume one unit each of cloth and wine while Portugal requires 170 hours of work to produce and consume the same quantities". Given their production technologies, their natural endowments, or economies of scale (depending on the aspect of reality