Comparative advantage examples
Do what you're relatively best at and trade for the rest — even if someone else is better at everything, you both gain by specialising.
What is comparative advantage? Read the full idea →
5 examples of comparative advantage
The lawyer and the typist
A lawyer who types faster than their assistant should still lawyer and let the assistant type — their hour is worth more in court.
Countries trading
Ricardo's point: nations prosper by making what they're comparatively best at and importing the rest.
The startup founder
Even a founder who can code best should often hire it out to spend their scarce hours on strategy.
Household chores
Splitting tasks by who's relatively best, not absolutely best, gets more done overall.
The all-rounder's trap
Being good at everything tempts you to do everything; focus on your edge and delegate the rest.
How to spot it in yourself
- Ask 'what's the highest-value thing only I can do?' and trade away the rest — even tasks you'd do slightly better yourself.
- Judge what to delegate by opportunity cost, not raw skill: the question is what you give up, not who's better.
- As you get more valuable, hand off more — every hour on low-leverage work is stolen from your highest-leverage work.
You'll forget most of this by next week.
That's just how memory works. Lock comparative advantage in with a 5-minute active-recall session — spaced repetition, no signup.
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