Another easy idea that took forever! More Engzig tie-in stuff.
Okay, so people have different competencies in different things. Hence, Ricardo’s law of comparative advantage:
In a famous example, Ricardo considers a world economy consisting of two countries, Portugal and England, which produce two goods of identical quality. In Portugal, the a priori more efficient country, it is possible to produce wine and cloth with less labor than it would take to produce the same quantities in England. However, the relative costs of producing those two goods differ between the countries.
England: 100 hours of labor for 1 unit of cloth or 120 hours for 1 unit of wine
Portugal: 90 hours of labor for 1 unit of cloth or 80 hours for 1 unit of wine
In this illustration, England could commit 100 hours of labor to produce one unit of cloth, or produce 5/6 units of wine. Meanwhile, in comparison, Portugal could commit 90 hours of labor to produce one unit of cloth, or produce 9/8 units of wine. So, Portugal possesses an absolute advantage in producing cloth due to fewer labor hours, and England has a comparative advantage due to lower opportunity cost.
In the absence of trade, England requires 220 hours of work to both produce and consume one unit each of cloth and wine while Portugal requires 170 hours of work to produce and consume the same quantities. If each country specializes in the good for which it has a comparative advantage, then the global production of both goods increases, for England can spend 220 labor hours to produce 2.2 units of cloth while Portugal can spend 170 hours to produce 2.125 units of wine. Moreover, if both countries specialize in the above manner and England trades a unit of its cloth for 5/6 to 9/8 units of Portugal’s wine, then both countries can consume at least a unit each of cloth and wine, with 0 to 0.2 units of cloth and 0 to 0.125 units of wine remaining in each respective country to be consumed or exported. Consequently, both England and Portugal can consume more wine and cloth under free trade than in autarky.
Wiki, slight paraphrase of formatting BS
Well, let’s take the idea a little further and say England isn’t much good at anything except chucking spears and whining. Or maybe they just enjoy it, or somebody else will do it for them. Then they decide to take all their useless young men to Portugal and say “Hey! Now you have to make wine and cloth for us too!” So there’s much less cloth and wine in the world because only Portugal is producing anything, but everybody’s still consuming.
If Portugal is productive enough, this can still be more economical than making a fuss. A war would be mutually destructive, and it’s not like there’s anything in African America worth taking. Er, I meant England. And you can’t exactly extract tribute either.
Hence, the piggyback ratio. How many piggyback riders can each Portugese person support? At what number of piggyback riders does it become more economical to try to throw them off?
The interesting dynamic here is that more piggyback strategists means more military strength, even as the resources thin out. It’s not like they have anything better to do. The less productive each piggyback rider is, the more likely they are to choose alternative employment as a parasite who extracts resources with threats.
So you’re an Englishman. You don’t know how to do anything productive, so you live in a mud hut. So do your friends. The guy next door has a big house and talks funny, and all he does is type on a magic typewriter all day. You get your friends and bum rush the place. You tie the guy to his office chair and eat all his food. But now there’s no food! You yell at him to make more typing noises and make there be more food. He does it. Wow! You invite more friends, but this time there’s less food to go around, and now there’s mud everywhere, and the place smells because your aunt decided your baby sister was a spirit and burned her in the cradle. 99% of the house inhabitants agree the Portugal guy should make there be more food, and make there be less smell from burning stuff. You yell at the Portugese guy until he cleans up and does more typing noises. There’s less food this time. The Portugese guy collapses from exhaustion…
You and your friends head to the house next door. See? Easy idea.