Critically analyze laws of comparative advantage Essay

Critically analyze laws of comparative advantage - Essay Example The theory of comparative advantage formulated by English economist David Ricardo in the early nineteenth century1. Ricardo encouraged each country to specialize in producing commodities for which it is best suited and then trade with other countries to obtain a wide variety of goods. The increased efficiency of production within each country makes greater worldwide consumption possible. This theory suggests that all nations have an interest in opposing restraints on trade. If less developed countries (LDCs) remain isolated and closed to foreign trade and investment, they lose opportunities to benefit from the technology, capital, and consumer goods offered by industrialized nations (Barry Clark, 1998). The theory of comparative advantage, of course, argues that unrestricted exchange between countries will increase the total amount of world output if each country tends to specialize in those goods that it can produce at a relatively lower cost compared to potential trading partners. Each country then will trade some of those lower-cost goods with other nations for goods that can be produced elsewhere more cheaply than at home. At the end of the day, with free trade among nations, all countries will find that their consumption possibilities lie outside their domestic production possibilities. The basic theory assumes that all the factors of production are... Further, it is assumed that perfect competition, and not monopoly production prevails and that all resources in each country are fully employed. The last is an especially important assumption, particularly for less-developed nations, since with less-than-fully employed resources, tariffs or other forms of protection (including subsidies) to block imports and to increase domestic employment could well be the preferred policy. With less-than-fully employed resources, the key allocative issue becomes an internal mobilization of domestic resources to their full use, rather than a reallocation among alternative uses. To be reasonably confident in applying the basic Ricardian analysis and its conclusions to any country or situation, it seems sensible, in practice, to inquire to what degree the assumptions of the theory conform to the reality of the economy under investigation. (James M. Cypher, James L. Dietz, 1998) While these are important considerations having to do with the validity of assumptions in practice, there are other concerns about a blanket endorsement of the comparative advantage argument and free trade recommendations for less-developed nations. Joan Robinson's comment on the real-time effect of following free trade and specialization, at least as far as Portugal was concerned in Ricardo's original example, remains provocative and presages our reformulation. (James M. Cypher, James L. Dietz, 1998) . . The imposition of free trade on Portugal killed off a promising textile industry and left her with a slow-growing export market for wine, while for England, exports of cotton cloth led to accumulation, mechanization and the whole

The Suicide of Willy Loman Research Paper Example | Topics and Well Written Essays - 1000 words

The Suicide of Willy Loman - Research Paper Example As an elderly male, he fits into a category that has a lot of suicidal cases. Willy reveals that he has lost his purpose and has placed his hopes on his sons, meaning his life should be ended so that the insurance money gives them a chance. Willy Loman takes his life because he is depressed, he has lost his job and his hope for his own future, and believes that in ending his life he is giving his sons a future through the life insurance company. According to Cafferty and Lerner, â€Å"When we meet Willy at the beginning of the play, he is worn-out, sad, and confused† (90). Willy has gone through a series of events that have made him feel like he is out of options. He has always seen his life as it should have been, rather than as it has been, and regrets what he could not accomplish, while also blaming everyone else for the reasons that he never achieved what he felt he should have achieved. It seems that Willy has always been sad and frustrated. He envies others and is never happy with his own life. Something as simple as the refrigerator that his neighbor owns brings him a great deal of unhappiness, as he feels his own one does not equal that level of quality he expects. He says, â€Å"I told you we should’ve bought a well-advertised machine. Charley bought a General Electric and it’s twenty years old, and it’s still good, that son of a bitch† (Miller 56-57). ... Biff says, â€Å"I’m thirty-four years old, I oughta be makin’ my future. That’s when I come running home. And now, I get here and I don’t know what to do with myself. [after a pause] I’ve always made a point of not wasting my life, and every time I come back here I know that all I’ve done is waste my life† (Miller and Sterling 52). Cafferty and Lerner state that â€Å"The sons, Biff and Happy, inherit their fathers worst qualities, the various tensions between them leave plenty of scope for all sorts of analysis†, which is evident in this statement by Biff. Biff cannot be satisfied by his work because he reflects the expectations that Loman has about making money (82). Because Biff witnessed his father having an affair while he was still in high school, the way he idolized his father was shattered, leaving him adrift in the world and picking up on the worst of Willy’s sense of failure. According to Gale, â€Å"The betra yal resonated with Biff his whole life and created a sense of distrust between father and son†. This distrust deflated Biff’s sense of self, as he had framed his life through Willy’s beliefs. When he saw his father as imperfect, those beliefs dissolved. He became the part of Willy that could not find the key to success. Willy has aged past his dreams now, his depression is a common problem amongst older adults, as he has past the point of being able to chase most of his dreams. He now looks towards his sons to carry on his hopes. By killing himself, he believes to support their futures. Scogin states that â€Å"Older adults have the highest rates of suicide of any age group, and this is particularly pronounced among men". Willy represents some of the reasons for the sense of