A Capital Ship

The Relentless
Revolution

‘A Goldsmith in His Shop’ by Petrus Christus, ca. 1450

The Metropolitan Museum of Art / Art Resource

A History of Capitalism
by Joyce Appleby
Norton, 494 pp., $29.95

Two hundred years ago, explaining to his contemporaries how capitalism worked, David Ricardo gave an example of the theory of comparative advantage in trade: Portugal and England could both produce wine and cloth, but each would fare better economically by specializing in the one it could bring to the market more efficiently and cheaply. Such specializations continue to fuel the capitalist economic system. The processor of my husband’s iPad, for instance, is designed by Apple in Cupertino, California, and manufactured by South Korea-based Samsung Electronics Co. Another South Korea-based company, LG Display and Japan’s Seiko Epson Corp. make the LCD display while Taiwan-based Wintek Corp. makes the glass overlay necessary to detect touches of users’ fingertips.

The examples of South Korea and Taiwan bring out an aspect that Ricardo, who died in 1823, could hardly have envisioned. The present comparative advantage enjoyed by South Koreans and Taiwanese, unlike that of the Portuguese wine producers, does not depend on a traditional commodity native to their homelands, unless it be small and dexterous hands. For the amazing integration of production and markets to work and bring an iPad to your local retailer, all a country needs are the legal protection of property rights (including intellectual property or shares in a corporation), the outlawing of monopoly protection, a good internal transportation and communication system, secure labor, supplies, and customers. Not to put too fine a point on it, is it any wonder that there is probably not a single component of any high tech product owned by readers of this review that was made in South America or (excluding Israel) the Middle East?