Can anyone further elucidate what's meant by "comparative advantage"? also, i find this sentence particularly interesting. how did they come up with this notion?
Comparative advantage comes from the ability to produce goods or services at a lower opportunity cost (you should also know what "opportunity cost" means to fully grasp the idea).
In the original formulation it means is that can be beneficial for two entities to trade even when one entity can produce all products cheaper than the other (it has an absolute advantage in all categories) if there is differences in the relative cost they produce those products themselves.
Suppose in a given day, Henry can catch up to 4 deer, or 6 antelopes. John can catch 24 deer, or 12 antelopes. John can catch way more of either animal than Henry, so we say John has an absolute advantage in both products. You might think that John can not benefit from trading with Henry, because he can produce every product better than Henry can.
However, we can break it down another way:
It costs Henry 3/2 antelopes to catch 1 deer, and 2/3 deer to catch one antelope (prove it to yourself: 6/4 and 4/6). It costs John 1/2 antelope to catch 1 deer, and 2 deer to catch one antelope. Thus, it costs less for Henry to specialize in catching antelopes, and for John to specialize in deer. This is comparative advantage. Then, when they trade at a rate between the two opportunity costs, they can achieve a combination of products unattainable individually:
Before trade:
- Henry: 6 antelopes, 0 deer
- John: 0 antelopes, 24 deer
After trade:
- Henry: 4 antelopes, 2 deer
- John: 2 antelopes, 22 deer
While their totals are the same here, because an exchange rate of 1 antelope to 1 deer works out here, it helps to look at it graphically:
For this, we can make a production possibilities curve (or line, to keep it simple), which is a graph of possible outputs where the axes are the amount of each product that John or Henry can produce in a day.
Here's Henry's: https://i.imgur.com/k9xS7Sj.png (vertical axis is antelopes, horizontal is deer)
Henry can obtain any point on or inside the purple. Any point outside of that is unobtainable. However, with trade, he can obtain it! The result of trade is the green dot.
Here's John's: https://i.imgur.com/V6aFZkm.png
As you can see, they both obtain points outside of what's possible to produce alone, due to comparative advantage!
Note: I don't claim to be an economics expert (just a high schooler taking the AP course!), and I'm sure there will be lots of better explanations in this thread!
We don't need AIs to achieve this level of self-directed autonomy free to engage in criminal behavior without consequences: we already have Employee Handbooks.
Is that illegal though? I mean, I can create an account for you on my web platform, and everyone else.
And that's what WF did: https://en.m.wikipedia.org/wiki/Wells_Fargo_account_fraud_sc...
And if the AI manages to actually assert control of property on its own, it is no longer a market actor, it is a revolutionary army.
But for the person who created the entity, losing the company is a better outcome than going to jail.
"who would be held responsible?" is still pretty easy here. by default, if you own or release to the public a system that ends up hurting someone, you are liable. it doesn't matter what your intent was or whether there was any way of knowing that the bad outcome would happen. the only way you can get around this is with "safe harbor" exemptions. it's possible that your blank slate would qualify, although you would probably have to lobby for this before the fact. in that case, no one would be held responsible. otherwise, you would be paying.
But computers can neglect some of those risks. Not all, but some. And therefore needn't be compensated for them, and have a competitive advantage over humans.