PRINCIPLE OF COMPARATIVE ADVANTAGE

units of production -- whether people or machines -- will be employed in those processes in which they are relatively more productive. This is the standard rebuttal for those who fear that machines will replace people. The principle implies that both people and machines can be fully employed regardless of their relative productivity. The long-run impact of industrialization and automation, it is argued, is not to reduce the size of the labor force but rather is to use machines in tasks best performed by machines and to use people in tasks which can only be done by people. (H. Simon, 1965, p. 6)

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