I’m watching another of the wonderful series of lectures in the Teaching Company’s Great Courses, this one on physics by Don Lincoln. He tells you how physicists know what they claim to know. This morning, for example, he showed me how they know that clocks run slower when moving at a speed close to the speed of light. It’s contrary to our daily experience, of course. But it’s true.
I’m an economist, and once you have become one you believe a bunch of facts that ordinary people, and even some misled “economists”, do not believe, or at least find astonishing and hard to believe.
Such beliefs are commonplace in any expertise. That the watery gunk in a pan put into an oven could become a cake, for example, is miraculous. Yet a real pastry chef knows even more amazing, counterintuitive facts. A skilled carpenter knows how to adjust the cut of two boards meeting at an irregular corner in a room. It’s a miraculous fact that any human infant can acquire any language easily, whether the language is Portuguese or Wayuu. Like quantum mechanics, it looks crazy and impossible from the outside.
Some facts in economics are like that. Becoming a real economist means learning why they are true—what the evidence for them is—even though normal people think the facts are crazy.
The most famous example of a crazy-but-true fact in economics is “comparative advantage.” A Nobel physicist at MIT once challenged his colleague, the Nobel economist Paul Samuelson, to tell him a fact in economics that was both true and unbelievably crazy. The physicist assumed, from his education, that a Real Science must have a lot of such facts—because his science does. A bit provincial, admittedly.
Comparative advantage says that Raphinha plays as a left winger and not at fullback or goalie, even though he might be better at fullback or goalie than anyone else. It would be stupid, of course, to put him at fullback, because of the goals the team would then sacrifice. Unless he stops more goals at fullback than he scores as left winger, he should specialize in being a winger. A mother can cook the evening meal and sweep the kitchen floor better than her eight-year-old son. She has an “absolute” advantage in both tasks. But to get the most out of both of them, like getting the most goals for Barcelona and Brazil, she does the cooking, the boy the sweeping.
Obvious, eh? But, the economist notes, it’s also true of whole countries. Virtually no one except an economist believes this. But it’s true. And it says that the usual way people talk about trade is false. It’s false to claim that Bangladesh can “compete” with Brazil because its wages are much lower. The claim is the excuse for tariffs “protecting” Brazilians. But comparative advantage says that Bangladesh should specialize in knitwear and Brazil in airplanes, even though Brazil could make even knitwear with less labor. It’s Raphinha and the mother.
Stop “protecting.” You’re shooting yourself in the foot. Or missing a goal. Or not getting the meal cooked.
Weekly column in Folha de São Paulo, Brazil
Translated into Portuguese for the newspaper.