Linked by Scott Cabana on Thu 2nd Dec 2004 20:18 UTC
Editorial A couple of days ago, I read an interesting article by Kevin Kostis about how complex computer systems are and how they have a long way to go. I have to partly agree with his assessment, however a lot of folks don't take the time to learn about there own investment.
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There are four basic concepts of economics which help everyone have more and live easier. Those are:

1. Division of labor
2. Specialization
3. Comparitive advantage
5. Trade

If everybody did everything for themselves, than everybody would have a standard of living of Robinson Crusoe. It is better for 10 people to specialize in one thing each and then trade with each other, than it is for them to do everything for themselves and not trade.

Comparative advantage comes down to what someone has to give up to produce something. I could make my own burger, for example, but it would take me couple of hours to get meat, fry it, make sandwich and do dishes. So to get a burget, I would have to give up the cost of meat, water AND couple of hours which I could have spent earning $17/hour on my temp job. Alternatively I could spend 15 minutes, and go to Burgerking and get a Whopper Junior for $.99. Burgerking has an assembly line operation for making Burgers, and they can make one in less than 5 minutes, since they have all the materials, special equipment, and staff which itelf divides labor into special tasks such as cashiers, sandwich makers, janitors, etc.

So it is better to do one thing well, and trade with others fow what you need, than it is to do everything yourself. There could be situations in which it is better to do something yourself, than hire someone to do it for you, but those situations are rare.