Advantage deception

Comparative advantage is another NWO - EU deception. It is a false argument that has at least four shortcomings. We will invalidate it as all their false arguments and NWO - EU altogether. First we will start with Absolute Advantage Theory which was presented by Adam Smith. We will use an example to explain both theories. Lets take two hypothetical countries, A and B that produce refrigerators and computers.

Refrigerator sector is more productive in Country A while personal computer sector is more productive in Country B. This means that A's productivity is higher than B's in refrigerator sector. Also, B's productivity is higher than A' in computer sector. It is important to clarify matters because Absolute Advantage Theory and Comparative Advantage Theory are similar but different, as it will become evident. Attention in details is required.

Adam Smith stated that both countries will benefit if A specializes in producing refrigerators while B specializes in producing computers. They will have to trade so that A gets computers needed from B and B gets refrigerators needed from A. Ricardo came after Smith and made some modifications to Adam Smith's theory with his Comparative Advantage Theory.

David Ricardo was born 50 years after Adam Smith. When Smith wrote "Wealth of Nations", Ricardo was 4 years old. Ricardo argued that both countries could benefit from specialization and trading even if B is more productive than A in both sectors, refrigerators and computers. This is a very important point and relates to NWO - EU deceptions. As we have explained, EU's model is deficient.

Countries with lower per capita income, have lower productivity and lower competitiveness. Because in EU there is free movement of goods and services, they can not compete with countries that have higher per capita income and are more productive. Competitiveness is also affected by price level. With EU's flawed model, economies in countries with lower competitiveness (for whatever reason) are damaged. NWO plans to implement EU's malfunctioning model in all other three continental Unions; American, Asian, African.

Lets assume that in A, refrigerator sector is more productive compared to computer sector in the same country. Also, in B, computer sector is more productive compared to refrigerator sector in the same country. According to Ricardo, both countries can benefit, if they specialize in the sector which is more productive, refrigerators for A and computers for B.

Absolute advantage compares productivities in same sectors between different countries. Comparative advantage compares productivities of different sectors in the same country. Comparative advantage theory has some merit. It does not see the whole picture though. It sees the tree but misses the forest. It can be useful, if used the right way. It could be catastrophic, if used the wrong way, as NWO's- EU's vicious cabal does.

There will be an improvement in productivity in both countries, if they specialize in their more productive sectors. Other things are happening that NWO - EU do not see. Lets assume that A abandons computer production and B refrigerator production and they trade. Country A buys computers from Country B and Country B buys refrigerators from Country A.

In Country A, refrigerators sector will increase production to supply Country B's demand. Country A will lose computers sector because the demand will be supplied by County B's production which will increase equally to Country A' computer market. Country B will lose refrigerator sector. So after the specialization, this will be the new GDP's for the two countries.

Country A

GDP2 = GDP1 + Refrigerators Market in B - Computers Market in A + Increase in A due to Specialization --->

GDP2 = GDP1 + (Refrigerators Market in B - Computers Market in A) + Increase in B due to Specialization

Country B

GDP2 = GDP1 - Refrigerators Market in B + Computers Market in Country A + Increase in A due to Specialization --->

GDP2 = GDP1 - (Refrigerators Market in B - Computers Market in Country A) + Increase in B due to Specialization

NWO's - EU's vicious cabal see only the last part, Increase due to Specialization. The two markets, that are swapped can not be equal. One or the other will be greater. Depending on their relative size, this swap can be a win - win or a win lose situation. Suppose that Computers Market in Country A is larger than Refrigerators Market in Country B.

Computer Markets in A > Refrigerators Market in B ---> Refrigerators Market in B - Computer Market in A < 0

Still we do not know if it is a win - win or a win - lose situation. County A has a decrease since (Refrigerators Market in B - Computers Market in A) is negative and an increase due to specialization. Country B definitely benefits since it has two increases, - (Refrigerators Market in B - Computers Market in A) and increase due to specialization. Minus a negative number is positive.

What we do not know is what happens in country A. We need one more comparison. There are three alternatives.

1) Computer Market in A - Refrigerators Market in B > Increase due to Specialization in A

2) Computer Market in A - Refrigerators Market in B < Increase due to Specialization in A

3) Computer Market in A - Refrigerators Market in B = Increase due to Specialization in A

In the first case, it is a lose situation for Country A. In the second case Country A benefits as well. In the third case Country A does not win or lose but it is indifferent. Since there is a lot of trouble involved in swapping markets, it is not worth it to do it, if it is indifferent for country A, or even if the benefit is small. It would have to be a large benefit to make it worth a while.

What will happen if Country A does not abandon entirely computer production and Country B does not abandon entirely refrigerator production? It will be exactly the same reasoning as above. The only difference is that Computer Market in A will not be the entire market but the part that is supplied by B's production. Similarly, Refrigerator Market in B will be the part supplied by A's production.

Usually market size differences are much larger than increases due to specialization. So usually it is a win - lose situation. One country benefits and the other loses, although there is an increase due to specialization in both countries. And this is just the beginning for invalidating the false argument that NWO - EU claim. Three more faults will be presented in following article.