Ralph Gomory explains comparative advantage once again and also calls cash on the latest nonsense in trade policy suggestions from the Financial Times claiming Japan should abandon manufacturing and is the cause of Japan's financial malaise.

Ignored in all these discussions is the obvious fact that when you don't make for yourself the things you need, you will have to trade for them. If you have to import cars and all sorts of manufactured goods, you will be importing on a large scale; to trade for them you will need to create additional goods or services that you can export on an equally large scale.