“Specialization and Trade: Because We Can’t Be Good At Everything” | LearnLiberty

Gather ’round everyone and watch as I work
to mow my lawn, build a fence, and install a faucet – all at the same time. How am I
going to mow my lawn, build a fence, and install a faucet all at the same time? Through specialization
and trade. In another set of videos, we discussed how
trade is made of win, and it is. In this case I’m able to specialize in what I do best,
which is teaching, writing, speaking, and making LearnLiberty videos. I’m able to take
the money I earn from all this and then pay people who are better at mowing grass, building
fences, and installing faucets than I am. Everybody is better off. Now I’m sure someone in the comments section
is going to say, yeah, but you’re terrible at this. He might be right. It just so happens
that I’m even worse at cutting grass, building fences, and installing faucets. Don’t believe
me? Ask whether you’d like to hire me to swing
a hammer at your house. Or even whether you’d just let me without having to pay. I’m not
so sure you would like the results. What’s cool is it this works even if one person
is absolutely better at everything than his or her trading partners. Let’s illustrate with a simple example. Let’s
imagine that Wes, my yard guy, has an awesome lawn mower and can mow a lawn in 30 minutes
or prepare a 75-minute economics lecture in an hour. I, on the other hand, take two hours
to mow a lawn and an hour and a half to prepare the same economics lecture. If we don’t specialize
in trade, my yard guy Wes spends a total of an hour and a half cutting grass and prepping
economics lectures. I, on the other hand, spend three and a half hours cutting grass
and preparing economics lectures. What happens after we specialize? If Wes cuts both lawns and I prepare both
economics lectures, he spends an hour cutting grass and I spend three hours prepping economics
lectures. We both save 30 minutes. That’s extra time we can spend doing pretty much
anything we want. Here’s a true story. We used some of that
spare time to have lunch together one day. And Wes, who has a master’s degree in philosophy,
then used some of his free time to attend one of my lectures and make comments and suggestions.
That’s just a simple example of the logic behind a simple but profound idea in economics:
trade creates wealth. And thanks to trade, I can cut grass, build fences, and install
faucets without hurting myself. Well, not too badly anyway.

100 thoughts on ““Specialization and Trade: Because We Can’t Be Good At Everything” | LearnLiberty

  1. Thanks; I've enjoyed it too. I agree, there is contention about the abolition of private property being an act of coercion (many anarcho-communism despise autocratic communists for trying to do this very thing, and others lean toward Mutualism as a transitional system). However, one can also argue that advocating private property is equally: an imposition, on those that do not wish to be subject to it. So, whilst your argument is persuasive it does, I trust you can see, work both ways.

  2. I'd like to see Art Carden's self-portrait caricature hire Aeon Skoeble's self-portrait caricature.

  3. Well, true, but that's certainly no reason to prohibit or limit trade.

  4. You have an interesting point, but I would make a different conclusion. We do indeed make false judgments about the benefits of various trades, but in a free society, we are free to discontinue that trade as soon as the error is discovered. But, when government makes such errors, correction for those errors is often far from simple. Once a law is passed, even if it is a terrible failure, it is difficult to repeal. This is because political decisions are not based on facts, but political capital.

  5. individualism would be, capitalism is socialism only under ceo s direction, stilll violates the individual. though some facets can only be created under the system of socialism, it should not prevail as such a central segment of society as it dramatically undermines the total good

  6. People can choose to work for any company, or no company. You could easily start a business from eg a lawn mower, taxi driver, barber, etc with a loan less than what most people would make in a day, so there would be little excuse not to start a business if employment is not a better prospect for your lifestyle.

    Plus libertarianism, isn't diametrically opposed to true communism, in that people could start communes, they just wouldn't have the right to aggression and theft for their membership.

  7. I'd love to have a Libertarian honestly answer a question for me- what if, say, somebody has no skill set and can't find work? Obviously, I know that it's their collective decisions that have brought them there (I would know), but I'm curious to see what you think they should do, since they have to simultaneously support themselves and make themselves better, while not really having anything to do the former with, and while somehow finding cheap education.

  8. that s theory not fact, what this government does to stomp out competition is using street criminals to break in destroy and steal property from those that are no in thier click, ask me i know personally, would have to have a different governemtn not based on either of theose socialist systems called capitalism and or socialism and in fact democracy the most horrid of all

  9. If they honestly can't find a job (as opposed to haven't yet found a job) then they can thank the minimum wage, which eliminates jobs that they would be qualified for because it makes them too expensive for the employer.

    Those jobs would provide a little money but more importantly they would help the individual get a better job.

  10. That's true. It's interesting, though, that while minimum wage barely allows a rent in some places (not even that in others), even less is advocated for. Even in my area, I'd be hard pressed to find rent that I could afford at even $4 an hour. I'd have to hope they gave me loads of overtime. Since most jobs require showering/shaving/laundry, unless there are ways to get that done whilst being homeless, rent would need to be cheaper.

  11. Has maximizing welfare ever proven to maximize the economy? The economy can only grow through goods and services. Therefore, maximizing worker output is what would maximize the economy.

    Though boom and bust cycles occur, the bust in capitalism is still better than the norm in most other systems. That is how the US can have the largest economy in the world while going through a recession.

  12. If you take out government regulation, there are tons of cheap educational options. Try the internet. I don't think there is anyone alive at has absolutely no skills. Can this person not move or even think? If this person has a disability, the Libertarian view does allow for charities which might be willing to help. Those that do not believe in government hand outs statistically give more to the poor than those that do, so in a Libertarian society you would expect more giving.

  13. You don't have to work in a specialized field. You can still engage in subsistence farming, but I'm pretty sure if your a normally person you would give up on that fast once you realized how much work it was. You couldn't have computers, phones, cars, etc, without job specialization. Your healthcare would be horrible as well, though you'd probably at least be eating healthy. Well, unless you sucked at farming and were starving to death, or just had bad weather one year.

  14. @Sam Bailey, just like trade is made of win, your comment is made of fail. Nice job.

  15. It doesn't really matter if somebody has "no skills" or "few skills". What matters is how much they're worth in any given economic situation. For a lot of us right now, that's "little to none" no matter what skills we might claim to have. As for educational options, the internet is an option, assuming that one has access to it, but past that, I have no idea what "cheap options" you might be referring to. Perhaps that's a lack of creativity on my part.

  16. Obviously, some people are going to make less money than others. That doesn't make the system bad or unworkable. Capitalism gave us steam power, railways, electricity, massive improvement in agriculture, the light bulb, television, computers, phones, etc. There has never been a time in the world like what was sparked by the Classical Liberal view adopted in the Age of Enlightenment. You look at income inequality, but I look at many people in poverty, having luxuries kings didn't have in the past

  17. As far as education, you can enroll in the UK's Open University which is a completely free online university. There are many other free options. Some of these are part of government programs, but it would be easy to imagine with deregulation of education, many free market ideas. You can get paid by getting enough youtube hits, so why not a free online school on youtube that makes money that way?

  18. If they have luxuries, then they aren't in poverty. Look at it this way: cellphones are now so cheap, that you can buy them for $5, and put minutes on them for $15. For $20 (less if the minutes are on sale), you can have a device that dwarfs the technological abilities of computers 20 years ago. And that same person who can afford that awesome device STILL can't afford rent, unless he rooms with a crack addict. I see a vast difference between the poverty you're talking about and the kind I mean.

  19. If you want to talk about real poverty, look up world poverty at $1.25 per day. The more economic freedom a country has, the less poverty they have on that chart. You can also look up Index of Economic Freedom if you don't know which countries have the most economic freedom. There is a reason why the US has to outsource jobs for cheap labor. Its because even in low skill positions, people generally make more money in capitalism.

  20. I have seen that index, and I appreciate it's usefulness. But I do have to point out that the dollar amount is relative. $1.25 can't buy you much HERE, where prices are inflated. Elsewhere, you CAN live off of it, even if extremely poorly. I don't think we can make a direct comparison based on an inflated/deflated dollar amount. :/

  21. And why do you think the dollar is inflated here? Because people have more money here. Its true that certain things you can buy more in other countries, but things that sell globally that's just not true. Probably the biggest difference in price is land prices, since land cannot be imported or exported. Still, people living on $1.25 per day in other countries don't have electricity, computers, television, etc, like many people living under the poverty level in the US.

  22. I do not dispute that luxuries are much cheaper here, but what matters, and what should matter, IMHO, in any discussion on poverty, is the cost of necessities. I think that you are correct in that poverty here is less of a problem than elsewhere. But it is still a problem, and refusing to acknowledge it by pointing to greater problems will not make it disappear. (Of course, I'm not meaning to imply that it is our job to do so.)

  23. Poverty is a problem, but my point is that it is a problem everywhere. The US does a good job of handling poverty compared to many nations. I know there are people in the US that struggle to afford necessities, but that has been true in every country in the history of the world. The US is a country people flee to, because of all the opportunities people have in it. The countries that embrace big government end up with far more problems in the end.

  24. Do you believe that if minimum wage laws fall, companies are given more power (less regulation), and allow a freer market, that people's standard of living (in general) would rise? You'll have to explain that to me.

  25. I think government welfare goes about poverty the wrong way. It normally gives people a hand out and stops there. The real solution, is to get people to learn to be productive so that they can get an income for themselves. I don't think the government does it that way, because the same politicians that support entitlements, get votes from people who receive entitlements. In this way, they are rewarded for increasing poverty and not the other way around.

  26. If what you want is teaching, then should you not preach for work study programs, or subsidized apprenticeships? I guess my point is that I think you're sugarcoating it a bit. If what you mean is "leave them to deal with their problems alone", then you should say so.

  27. My personal experience, is that minimum wage has little effect on anything. I've worked low skill jobs and had friends that worked low skill jobs and we always got paid above minimum wage. I don't even know who gets paid minimum wage. I'm pretty sure if you tried to pay people $1.50 an hour in America, you wouldn't be able to hire anyone, unless someone was extremely desperate. Illegal immigrants get paid less, but that's because they can so easily be blackmailed, being illegal and all.

  28. I am not sure whether I believe in a "race to the bottom" or not, but I think that if such a thing exists, then I would lose no matter who won. I think a lot of people are in that position.

  29. I do believe that deregulation would increase the middle class. In my given profession, regulation has created a ton of qualification inflation. I had to go to about 500 hours of seminars, get a bachelor's degree, and I'm still not certified because there is a waiting period. A little more than 10 years ago you could get in my field with a high school degree, 75 hours of seminars, and a little time spent working as a trainee, which I also have to do.

  30. I think the entry into fields, like what I am doing, would be easier with less regulation. I think that might hurt the upper income earns a bit because they would have more competition, but the typical person would be able to reasonably get a job without getting saddled with tons of student loans first. Regulation never seems to hurt the rich. It only hurts the middle class. Ideally, society would have a large and strong middle class.

  31. I'm one of those who went to college for what I was best at, but it was my fault that I didn't wonder at whether I'd find a job in Communications. $30,000 in student debt later, and I'm working 60 hours a week, 40 at a retailer, and 20 in a warehouse. I'm running myself ragged trying to make up for my mistakes. 🙁 I'm not worried, in these conversations, about myself, but about those who have it much worse than me. I'm lucky.

  32. Part of the issue with needing so much education and then it not paying off, is something I noticed when they were telling us to go to college when I was in high school. If everyone does, then we won't get educated to get ahead, but rather to keep pace. The issue, is that you have to spend time you could have been working on education and you end up saddled with debt. This is qualification inflation and its caused by the government making access to college easier. (not cheaper though)

  33. We agree on that, although most of my "help" was through the loans I received. I got a bunch of academic scholarships. Shaved off a bunch of debt I would have had, but that didn't help me all that much in the short run. I still have "no skills", as the degree is now, as you say, par for the course.

  34. I believe teaching at all levels would be better if we had more privatized school. The issue with public school, is that there isn't an incentive for success. Its actually the opposite. The school system in my area intentionally tries to get kids labeled as special ED and tries to keep them that way, because schools get more funding for those kids. Schools, like anything else, need to be based on results or else you'll get a bad product.

  35. The issue I have with that line of thinking is that those who can PAY for it will get a better product. Those who can't now have the same old options of "bad products" (with added costs and fees) or NO product due to costs and fees they can't absorb. I'm not sure how that helps people who can't afford private education in the first place. I know competition lowers prices, but not THAT much. Not with what it costs now already.

  36. As I explained before, much of the educational system can be free, with the use of the internet. What we get now, is an expensive system that even once we graduate, only allows for average results. You shouldn't have to spend thousands of dollars just to get average. Of course the wealthy will be able to access better schools, but is that really any different from what we have now? The wealthy get ahead by going to prestigious private schools while the rest learn to be average in public schools.

  37. Actually, what's most surprising to me is that people think how it is now is the only way it can be. Multiple videos on this channel say education as we know it is the problem with education. watch?v=Omx5KrRVkMc
    In the 1800s there was a schooling system (banned before the 1900s) that if existed today, would only cost $40/year (wiki/Educational_reform#Educational_economies_in_the_19th_century) So, yes, it could lower prices "THAT much," even with what it costs today. What is isn't what must be.

  38. List for me, then, one example of a company 'distorting' the market in an oppressive manner (that only benefits the company and has zero benefit elsewhere) that was not caused by government intervention.
    Examples of what not to put:
    A company that gains a monopoly by having lower prices (it must raise them oppressively *before* government steps in)
    A company maintaining prices through bailouts
    Government creating laws that force companies to adopt shady practices.
    Good luck.

  39. That is the saddest set of malarkey I have ever heard. "You don't own something because you didn't make it yourself"? Who has a higher claim to it than I do? The person who could have had a higher claim forfeit his claim when he took ownership of my property in trade. So the proper answer is no one. watch?v=muHg86Mys7I

  40. "So let's see what I can't include…" – Did I say any of those? Your claim was that businesses on their own will "distort the market" and couldn't exist without government. So, show me an example of where this is true. Actual, real world example where this distortion has happened and it wasn't because of government, but the lack thereof.
    Your sarcasm and immediate strawmanning of the rebuttal are very telling.

  41. Yes, continue to "prove me wrong" by pointing characteristic of the arguer and not flaws in the argument. That totally works every time, lol.

  42. Just because you customize your newfound property does not mean the system is inefficient. Apple takes silicon, oil and metals and customizes them into iPhones. The efficiency comes from not needing to know how to build an iPhone yourself, but instead engraving or 'bedazzling' it for the improvement. Or going all the way back, I don't need to own a silicon mine to make computer chips. Someone who is good at it can do that for everyone.
    What waste?

  43. Again with the "proof by who the arguer is" statements. It's called ad homenim, and appeal to authority. Try answering the arguments instead of the incessant sarcasm. You underestimate me with your negativity. I only misread your sarcasm, you now have your reply. Look at all links before replying.

  44. Maybe you can't read. I said I replied to that, and to look at all the links before replying.

  45. Again, I said there were links to read. Where there links in the one you replied with Dubai to? No, there wasn't.

  46. By your own admission there are other laws that are keeping them there or that are in some other way indirectly forcing them to work for depressed wages, so there's not much of an argument there. Sorry, but the lack of laws concerning a topic does not make that topic an example of the free market.
    Now, can you be done with your childish Dubai "trump card" and move on to the arguments in the links? If you "read" them you would know you needed to watch them, and you haven't covered their topics.

  47. "As soon as you quit your job in Dubai, your employer has to inform your bank. If you have any outstanding debts that aren't covered by your savings, then all your accounts are frozen, and you are forbidden to leave the country." – This would be a *law* in Dubai according to the article you gave me.
    We *are* arguing the merits of a governmentless free market, so your points must be relevant to that topic. Like I said, your trump card is moot in this discussion, move on.

  48. That doesn't matter either. Without government, there would be no passports, no borders, no work visas (yes, unlike you I read the articles asked of me). So withholding a passport would mean nothing without government laws restricting travel across imaginary borders.
    Preventing competition can only be done through force of government, same with movement. That just goes to show you did not follow the links I requested of you, since that was covered there.
    Now, for a third time, governmentless.

  49. The very first link given in the rebuttal list speaks on competition. watch?v=eO8ZU7TeKPw
    Nice to see that your only response is ridicule of the arguer, still trying to prove me wrong with that.
    "When that attribute is lost…" That is what your supposed to be proving to me, which you are going nowhere fast in that process. Baseless assertions will not help you here, where is your evidence of this? Your sole example thus far has been exploitation by working with governments.

  50. Not the government having force. I knew that. The part you need to prove is that private entities will successfully fill that power void left by abolition of government. So far your example is Dubai where businesses take advantage of government power to bolster a monopoly.
    For somalia mises(.)org/daily/5418 and /1855

  51. It's really, really hard to do that though. For example, if rents were regulated to be limited low enough that someone earning $4 an hour could afford them, many landlords would conclude that it would be a better idea to do something else with their properties and the issue facing you would not be finding a place that you can afford, but finding one at all. This happens everywhere that price controls are instituted.

    And there is really no other non-organic way to reduce the cost of renting.

  52. If you genuinely can't find work, you can always work for yourself. You can take out a small loan to purchase some tools that will allow you to be productive. It may not provide instant security to do this, but you must understand, the VAST majority of the world is insecure. The States are somewhat unique in that able bodied persons are unlikely to remain homeless unless they choose to.

  53. Dubai has labor laws but it is an Islamic state governed by a monarchy so the ruling elite ignore these laws.

    Dubai is hardly a great example of what a free market system can produce under a government that respects individual rights and freedoms.

  54. I'm not advocating for price controls, as I'm well aware of their adverse effects. I'm simply pointing out that if minimum wage goes, the basic wage for retail employees (usually), then the job instantly becomes unworkable, because they have to be presentable, and being presentable is too expensive for that wage. Unless some kind of cheap, public pay showers become the norm for homeless workers.

  55. This is not my usual mindset, you're right. I'm not used to even the idea of BEING insecure. So this is all new to me- I was sheltered and now I'm just thrown into thin air clawing for something solid. Thank you for helping me out with that response.

  56. Just follow the money my friend. Things will improve. In the mean time keep a light foot on the road. It'll save you soooo much money.

  57. This also assumes that a large number of people actually make the minimum wage. However, according to BLS(.) gov not only are there very few workers on the minimum wage (about 5% of all workers paid by the hour) but most of them are single college or high school students.
    However, the unemployed are much more diverse, and it stems mostly from the price control known as "minimum wage." Once people start working, their wages quickly rise with experience. watch?v=vDhcqua3_W8

  58. Not that I'm a paragon of learning, but I think that's a little misleading. What I'd love to see is a chart of ranges of pay. I mean, I know a lot of people that make more than $7.50. They make around $7.90 or so because of a small raise, or because of a very slight change in pay compared to somebody else. And I wouldn't assume that they'll keep that wage if minimum wage goes. I think that wages that close to minimum are "tied" to it. If it falls, their wage will too.

  59. It is clear from your reply that you did not watch the video linked in the previous comment. If you are not willing to view all evidence presented to you in a discussion, there is no need to continue it.

  60. I didn't even see the link. -_- I'm used to w's and dotcoms in those.

  61. Ah, that one. I agree with it, but I have a lot of anecdotal evidence that disagrees with it. Maybe I just know a lot of idiots, but most of them make little more than me and aren't doing all that well. Layoffs and the like, you see. I'll have a greater ability to judge it when I have a few years under my belt to look back on it.

  62. Honest mistake to miss the link, YT doesn't allow full links in comments. It is possible that most of the layoffs and such are due to government policies like the Min Wage and other government regulations. (LINK watch?v=IRb2wBVuX28)

  63. I watched that one yesterday. I think it's the incoming costs of new regs to be honest.

  64. is it because the talking heads told you that jobs leaving america = bad?

    unless you like, ya' know, had a good reason to say that its not as good globaly

  65. Maybe the reason prices are higher in the ghetto areas is because the people who live there are rich because of all the benefits and food stamps they receive.

  66. By definition, the skill of taking care of themselves is a skill. Whether that's producing food, making clothes, fixing things around the house. So I don't see how an unskilled person can remain unskilled for long.

  67. What about I mow the lawn in 1h1/2 and Wes in 1h, and I write the lecture in 1h and Wes in 1/2h ?
    It takes 1h for Wes to write both lectures, and it takes me 3h to mow both lawns.
    If we don't trade, it takes Wes 1h1/2 to do both tasks and it takes me 2h1/2 to do both tasks.
    So by trading, Wes gains 1/2h and I lose 1/2h.
    What do I don't get ?

  68. Trade is perhaps the least radical idea in history but I'm sure some people will speak against it in replace of who knows what.

  69. The trade doesn't happen.

    He really should have said "can happen" to avoid corner cases like this where no net gain occurs.

    It's actually more complicated when you take into account the monetary value of each task, but this is just a 2 min, 44 sec example, not a college course.

    ( note: you get a similar result reversing the trade – Wes loses 1/2 hr and you gain 1/2 hr)

  70. On the contrary, if the employer can't get presentable employees for the wages being paid, he will have to increase the wages offered to get the employees.

    I admit though, that sort of situation is really difficult to handle. But the libertarian view is that it's for individuals to decide what they will do about such situations, not decide what others will do about them.

  71. I know you only have 150 characters, but this is an extreme case. In my mind this person is either severely physically or mentally handicapped or been left in the woods and has become ferral. But to humor the case, in a libertarian philosophy, you own your body. You can sell blood, donate sperm, participate in research trials (drug trials, behavioral studies and the like) or sell your body (prostitute). The key is to have a society that doesn't make people feel ashamed morally 4 circumstance.

  72. And see i even ran out of characters. The most important issue is that your question shows a position that is pure theory. Unless you are severely handicapped either mentally or physically, you always have a skill. Dish washing is a skill, as are waiting tables, manual labor, gardening, etc. It's not ideal, and people don't ever begin life with the same circumstances. But you must realize that those that did have a better start can thank their parents. Your somebody is just the starting parent.

  73. I'm not understanding. They made a choice – the least expensive of two options.
    What is involuntary about what you describe??

  74. People can learn to grow their own food & make their own clothes if they want. They don't have to trade but they choose to. Ghettos are in the middle of no where & grocery stores are very abundant. They can drive a little further with no problem to access a store that might have cheaper prices.

  75. Don't be misled by Learn Liberty. They are not all renowned, influential or accepted economists, nor has anyone of them ever studied or taught in decent universities. Those of them who actually have studied economics know that they actually spew bullshit but are probably too afraid to lose their job in their sect-like think tank.

    Greetings from a real 'capitalist'.

  76. Don't be misled by AmauryPenseur. He is not renowned, influential or accepted youtuber, nor has he of them ever studied or taught in decent universities. He is strongly disliked in the youtuber community blah blah
    Greetings from the real 'AmauryPenseur'

  77. This is a pretty inane discussion of something which everyone already agrees on – that people should do what they're good at. No-one is advocating that people go around doing everything, or things that they are terrible at. 'Trade' is not the reason all of those tasks can be done – the division of labour is, and that is something which can exist independently of trade, and indeed must do. Trade is just one way of organizing the division of labour, it is not synonymous with it.

  78. he spends a few hours a day making videos to pay for some mexicans to clean and repair his house for minimum wage

  79. Awesome Art Carden! This makes economics, make more sense! Thank you:-) Enjoyed this video!

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