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The problem is that the analysis of the alternatives only ever takes into account efficiency and not resilience. Which is typical of “rational expectations” belief systems based upon atomised individuals.

However the real world has politics in it, as we saw during the pandemic, at which points jurisdictions commandeer resources for themselves regardless of whether a “better price” is available elsewhere.

Within a jurisdiction where resources can be directed you only need one capacity for output. In a market situation you need multiple suppliers all of which with excess capacity to supply that you have reserved and which cannot be countermanded by other action (so it needs to be defended with military capacity). Once you cost all that in you may just find that doing it yourself is more efficient, once resilience is taken into account properly.

Nature rarely goes for the most efficient solution. When it does it tends to go the way of the Dodo.

>It's actually worrying me quite a bit that people seem to have completely forgotten what a comparative advantage is.

A comparative advantage is a past fixed cost investment whose output has not been consumed in its entirety. Hence comparative advantages are created outcomes and not something you can follow.

The reason why a competing nation doesn't build their own industry is that they would have to duplicate the fixed costs of initially starting the industry and it is cheaper to pay only for the ships you need. If the government made the investment anyway, it would now have given its economic potential a concrete form and switching to a different form is expensive. Producing a different commodity requires paying fixed costs again. hnwnce, after the investment there is a comparative advantage to produce commodities whose fixed costs are already paid for. They are literally cheaper to produce than other commodities.

Meanwhile if you were to go to the other extreme. What if there was an activity without any fixed costs? The concept of comparative advantage would be meaningless, because switching tasks costs nothing.

> The biggest problem with this thinking is that nationally mandated production is fundamentally unable to reduce dependency because national economic policy cannot increase aggregate output. That's to say when you politically prioritize to build ships the question always is what you aren't building instead, because all allocation consists of trade-offs.

The trade off is worth making. It gives you the ability to survive if things go wrong in return for being slightly worse off in the meantime.

> It's actually worrying me quite a bit that people seem to have completely forgotten what a comparative advantage is. Free trade is good because it gets you more stuff

It can also mean very little more stuff. Part of the problem with our current system is that we will import rather than produce because its very slightly cheaper.

It would be ridiculous for the UK to grow its own tea, however it would be perfectly reasonable for it to aim to produce more of its own basic foodstuffs.

>comparative advantage

Makes a lot of sense in textbooks. But in the real world, when politics is involved, the whole theory breaks down. What does your text book say about China holding rare earths hostage in regard of comparative advantage?

Someone else starts their own mines, everyone goes a little poorer.

except for oil, most countries aren't dependant on other countries just to survive in the near term (food is one of the few things countries will usually attempt to ensure they are selfsufficent in, if it's feasible)

The UK is far from self sufficient in food. You'd think they would have learned from their mistakes after they nearly starved to death due to the Axis blockade during WWII, but apparently not.

It's worrying to me that the idea of comparative advantage has become such common parlance among non-economists that it's being used to justify everything without any real analysis or justification. It's not a solution for everything and it's not always applicable or relevant. Free trade is good, sure, but that's not the discussion here. It's not about free trade vs no free trade. Nobody posed that question here, so why are you bringing it up as if it's relevant?