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Bonus Quotation of the Day…

… is from page 3 of the 1976 second edition of my late, great teacher Leland Yeager’s sweeping International Monetary Relations: Theory, History, and Policy (footnote deleted):

Like technological progress, trade widens the range of available ways of transforming labor and other resources into desired goods and services. Technological progress and geographic specialization both make this transformation more “efficient” (to us a loose but convenient word). The basis for specialization and trade among countries of the world is the same as for specialization and trade among states of the United States.

DBx: Yes.

Stealing the essential idea from David Friedman and Steven Landsburg, I often ask my students to imagine that a Ms. Edie Thomas invents a machine that in a matter of days converts bushels of ordinary corn – maize – into automobiles identical in quality to brand-new Honda Accords and worth in value far more than the corn from which these cars are produced. Pour bushels of corn into this machine, and within a few days it spits out high-quality automobiles.

This machine is also relatively easy and inexpensive to build and to operate. Making matters even better, Ms. Thomas – a most generous woman – refuses to patent her machine. Anyone who wishes to do so can produce one (or several) such machines.

How would society look upon Ms. Thomas and her marvelous machine? Apart from owners of, and workers at, companies such as General Motors, BMW, and Toyota, almost everyone would applaud Ms. Thomas both for her genius and her generosity. She would be hailed as one of humankind’s great benefactors. And rightly so.

Of course such a machine seems to be an impossibility – a device that even the most brilliant inventor could not possibly create. But this conclusion is mistaken. Such a machine in fact does exist. In fact, many such machines exist. To see a picture of one of these machines, look below the fold.