system
Given the following post, respond as if you're commenting on Reddit:
human
What will globalisation look like when wages are too high and comparative advantage is lost?

Comparative advantage in today's global economy is basically one countries wages are lower so stuff is built there and sold to countries with high waged worker what will happen when everyone is making a wage such that comparative advantage is lost will protectionist policies be put on to propel domestic industries like post great depression?
gpt
I think you're misunderstanding comparative advantage.

Comparative advantage is like this: Consider two countries that both make wine and cloth. Country A can make *both* wine and cloth more efficiently and more profitably than Country B. But Country A makes wine *much* better than Country B does while making cloth only a little better. So wine is just way more profitable for Country A than cloth is. In that case, Country A is better off buying cloth from Country B even though it's more expensive than making cloth themselves because overall, it's better to focus production on making and selling wine.

For Country A, switching production from wine to cloth would cost more than the cost difference between producing cloth and buying cloth. So even though Country B doesn't have any products that it makes better than Country A, it has a *comparative advantage* in producing cloth because it has a lower opportunity cost for not producing wine.