For Argentina’s Small Farmers, Land Is Predictable But Markets Are Not
Thirty years ago, in my economics textbook in India, the section on international trade referred to Argentina. It would be better, according to the textbook, for Argentina to concentrate on the production and export of beef, while Germany should direct its resources towards the production of electronics. This example was used to illustrate Adam Smith’s ‘absolute advantage’ principle – countries should focus on what they do ‘best’, rather than diversify their economies. It seemed churlish to me, that developing countries such as Argentina should only produce raw materials, while wealthy countries such as Germany went ahead with technological development.