# Comments on Division of Labor and Comparative Advantage Summary::Based on these related principles Free Markets offer an opportunity for all wanting work. # Link --- # Synopsis Division of Labor and Comparative Advantage represent two of the most important concepts in free markets. Together they question the idea that the impossible scenarios of equal opportunity and equal outcomes even make sense. Division of labor and comparative advantage means that there's opportunity for any member of society. When these producers have one of their regular meetings it occurs to them that they can produce more total goods if each of them produces only one good at a time. But how do they decide who produces what? Joe, for example, can produce more bread, pancakes, wheat, and corn than any of the other producers; thus Joe has a production advantage for all of these particular goods. Which of them should Joe produce? Of the four goods Joe has the capability of producing more wheat than he can of any of the other goods. Sam has an advantage in producing pancakes over both Mike and Pete. Thus, although Sam cannot produce more pancakes than Joe he does have a relative advantage over both Mike and Pete. It can be said that although Sam does not have an absolute advantage in the production of pancakes he does have a comparative advantage. This same distinction applies to all the products and producers. Each of the producers produces a product for which they have not an absolute advantage but they do have a comparative advantage. Now that the producers have created a way to increase their overall production, they are left with and other dilemma. Each of them now has more of the good that they produce than they need to consume and they don’t have enough of the goods that they don’t produce. Their solution to one problem has created another. The process of exchange allows for the optimization of the effectiveness and efficiency of an economic system. Exchange provides the opportunity for the division of labor and comparative advantage. [[Fallacies of Equality and Equity]] [[Division of Labor]] # Conclusion When we combine the division of labor and comparative advantage with the ability to exchange in a free market, the system provides the most effective and efficient allocation of resources and it creates employment for people of all abilities. It turns natural inequalities into benefits for an entire market. --- # References The Free Market Journal: [Division of Labor and Comparative Advantage](https://freemarketcenterjournal.com/2023/11/07/division-of-labor-and-comparative-advantage/)