ohhh the (100 or so year old) theory of comparitive advantage....
stick to what you are good at and dont try to do anything else. seems ok i guess if you are not prepared to take risks and innovate.
oz is a world leader in digging up minerals, has been for a while.
imagine how much better off it would have been now if instead of importing the caterpillar trucks from the US it made it started making its own.
it would then be able to supply the capex of its own industry (thereby increasing net wealth as demand for commodities doesnt change depending on where the capex is sourced from) and may even lead it to become an exporter of capital goods to other places where mining occurs.
i guess the Finns are extremenly greatful that they paid no mind to the theory of comparitive advantage, for if they did they would have been content to ship timber rather than having a lot of the worlds mobile phones made by Finnns and making them much richer than their traditional income sources.
the car industry in oz is r**ted not really due to high real wages (the germans get paid more) but rather it is controlled by foreigners who have a VESTED interest in not letting the industry in OZ evolve as foreigners own it...
