Comment by littlestymaar
Comment by littlestymaar 2 days ago
> Everyone seems to be celebrating this as a victory for the US, but I can’t help but think of David Ricardo’s Law of Comparative advantage
This theory has always been an overly simplistic model designed to promote the ideology of free trade. The most obvious problem with it is that it only works in a static world where everything stays the same and as such specializing makes sense. But the world isn't like that, and if everybody invests only in the places where they have a comparative advantage, then you have set up a trade network that is very vulnerable to asymmetric shock: if one good becomes irrelevant or too desired, then the system starts failing.
Germans are learning it the hard way now that ICE cars are getting out of fashion.
As always, there's a yield/resilience trade off, and at nation scale, favoring yield is a recipe for disaster.
>Germans are learning it the hard way now that ICE cars are getting out of fashion.
Sadly, "the hard way" is the only way Germany learns lessons. All that national pride on German ICEs is coming home to roost. I remember when I was working for a large German auto company a while back, a division manager laughed at a Chinese auto company in a presentation that "they have tradition since 1995 lol". The arrogance aged like milk.
It's not a nation that values proactive thinking and adapting to change but stubborn pride and conservativism.