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L.A. Hall

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Does comparative advantage mean a one-world economy would be less efficient?

Please, tell me if I'm an idiot. I have a macroeconomics question. The concept of comparative advantage forwards the idea that, even if one individual is better at, say, making shirts AND shoes, than he can be more efficient by teaming with another maker of those same two goods, EVEN if he is worse at both. Does this mean that if you had a territory of a hundred thousand square miles, it would be more economically efficient to divide it into two states rather than keep it as one? And does this, by implication, mean that a one-world, united economic, political system would be LESS efficient and productive than a divided one? Does this mean that the more divided Earth's territory becomes, the more economically efficient it becomes? Answer me, smart people!

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    Jan 4 2013: I agree that is what national (or any ) boundary does in general. That does not mean it cannot be changed (even on a global scale).

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