This is

CBS I and the world. I'm John Bachelor.

Adam Smith's Wealth of Nation, 1776,

easy to remember, hard to understand, which is why I need David Henderson of the

fount of the Hoover Institution to help me understand a debate that David has

witnessed over many years writing about again on his blog about a term of art in economics.

There's Adam Smith and then there's comparative advantage and maybe the world's

exist together maybe they don't. David a very good evening to you it's great fun

to plunge into the English language and say what does that mean?

Yes. The quote we have from and you stipulate this is page 478 to 479 of the Edwin Cannon version of Adam Smith's

Wealth of Nation 1776. I read, what is prudence in the conduct of every

private family can scarce be folly in that of a great kingdom.

If a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy it of them

with some part of the produce of our own industry employed in a way in which we have some advantage."

End quote.

David, the question is, is that comparative advantage?

And we better do some definition because we now have to talk about also two famous men in economics

James Mill and David Ricardo what is comparative advantage good evening to you good evening John so comparative advantage

refers to a

versus another country being having advantage versus another country

in producing a particular good.

And Ricardo's insight is that the way you would tell

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