>It's actually worrying me quite a bit that people seem to have completely forgotten what a comparative advantage is.
A comparative advantage is a past fixed cost investment whose output has not been consumed in its entirety. Hence comparative advantages are created outcomes and not something you can follow.
The reason why a competing nation doesn't build their own industry is that they would have to duplicate the fixed costs of initially starting the industry and it is cheaper to pay only for the ships you need. If the government made the investment anyway, it would now have given its economic potential a concrete form and switching to a different form is expensive. Producing a different commodity requires paying fixed costs again. hnwnce, after the investment there is a comparative advantage to produce commodities whose fixed costs are already paid for. They are literally cheaper to produce than other commodities.
Meanwhile if you were to go to the other extreme. What if there was an activity without any fixed costs? The concept of comparative advantage would be meaningless, because switching tasks costs nothing.
A comparative advantage is a past fixed cost investment whose output has not been consumed in its entirety. Hence comparative advantages are created outcomes and not something you can follow.
The reason why a competing nation doesn't build their own industry is that they would have to duplicate the fixed costs of initially starting the industry and it is cheaper to pay only for the ships you need. If the government made the investment anyway, it would now have given its economic potential a concrete form and switching to a different form is expensive. Producing a different commodity requires paying fixed costs again. hnwnce, after the investment there is a comparative advantage to produce commodities whose fixed costs are already paid for. They are literally cheaper to produce than other commodities.
Meanwhile if you were to go to the other extreme. What if there was an activity without any fixed costs? The concept of comparative advantage would be meaningless, because switching tasks costs nothing.