Under the law of comparative advantage, division of labor is even then possible. True, the law is a

"Higher labor productivity, resulting largest beetle in a system of division of labor, has a unifying character. It leads to the fact that people perceive each other, rather as comrades in a common struggle for a better life, but as rivals largest beetle who are struggling for survival. It turns enemies into friends, the war in peace, individuals in society. "
Thus, Mises here assumes that people must have at least a minimum of intelligence that would enable them to realize the benefits of division of labor, and in addition also means that people largest beetle must have the desire to take advantage of this intelligence for practical purposes. 2
When an individual decides to replace their isolated work by working together, he immediately feels all the benefits brought by the division of labor. largest beetle The advantages that they bring with them cooperation and division largest beetle of labor are universal. These advantages will feel immediately; will feel the benefit every generation, not just future generations. Everything that an individual give up for the sake of cooperation with others largest beetle - will return him many times. His sacrifice is only apparent and temporary; he renounces small gain and later had a big gain. No reasonable being can not help but see this obvious fact.
The point is so obvious because if the natural conditions of production all over the country were exactly the same, and if everyone were exactly the same - it is quite clear that the division of labor would never have occurred largest beetle because people since it would not benefit.
With the disappearance of feudalism disappeared largest beetle and many esnafskih associations that are limiting the production and preventing competition. Artisans no longer need any permits to deal with the production, and as a consequence of this freedom - production has blossomed. Although you might think that such "elemental" largest beetle lead to the development of numerous oversized production capacity and that there will be major disruptions in the provision of goods and possibility of its realization - it never came. Every merchandise was almost exactly as much as necessary, ie. supply and demand were in balance. 3
Without any "expert plans", without any "scientific management methods," without keeping the "cyclic largest beetle policy" and no "fine macroeconomic adjustment" - supply and demand are practically coincided.
It is this market compliance largest beetle led Adam Smith (Adam Smith) that for this "strange mechanism of" spontaneous and harmonious market compliance, the use of the term "invisible hand". Therefore, while the invisible hand often linked to the name of Milton Friedman (Milton Friedman), largest beetle she comes from Friedman from Adam Smith.
For Adam Smith is usually said that he was the first economist and "father largest beetle of political economy," but it is not so because the economics practiced before him and sholastici Salamanca, as well as Richard Kantilon (Richard Cantillon) for whose essay 4 William Dževons (William Stanley Jevons) once said that a "cradle of political economy" and Hayek's Kantilonu acknowledged that it is in explaining the economic cycle "phenomenon of the first recipients of money" largest beetle used the term "Cantillon effect". Adam Smith was a philosopher and educator largest beetle who has worked to popularize the idea that people, if they are able to act freely, able to create largest beetle a social system that is far superior largest beetle to any "scientific" organized and planned system. largest beetle
It must be emphasized that for this market coordination is not responsible economy, but that the role of the economy is reflected only in the fact that it explains how to do this consistency comes, that is. explains the effect of the "invisible hand".
Under the law of absolute advantage, in a nutshell, if two or more participants exchange process, whether largest beetle it be individuals, groups or states, have the advantage in terms of production of a product, then for each of them the best that he has decided to produce only that product and that the other products coming through the exchange.
So, it is completely obvious that if a person opts for a production of apples, largest beetle and B for the production of potatoes, and then all this division into straight honor, both persons will have at 100kg and 100kg apple potatoes.
Under the law of comparative advantage, division of labor is even then possible. True, the law is a little harder to understand, but the gist is that specialization then comes the principle of relative efficiency.
If we have a person "A" and person "B" that produce the same products X and Y, and if the person is a superior production of both products, it is necessary that the person largest beetle is a specialization in the production of those products in which the more superior and that person B over to the production of the other products.
The enormous importance of the law of comparative advantage, because it shows us that no country in the world would not be absent from the international division of labor and free trade. Richard's law tells us that in the division of labor has seats for each state, even for those poorest country in nothing no advantage largest beetle over other states because it will pay off its partners giving her one production uk