Let's get into some nitty gritty mathy magic known as Economics, specifically, something I'm fascinated with: Comparative Advantage? What is that? Well, let's find out. 

Comparative Advantage describes the capacities of production between two (or more) different countries. How do countries decide what to make, how much to make, and what to trade it for from another country? The answer is just a moment away. 

Different countries are good at making different things. Saudi Arabia produced Oil, and the midwestern United States makes lots of food. The Chinese make cheap consumer goods, and Silicon Valley creates new technologies. 

Let's break this down in a very simple way. We'll reduce two countries down to two individuals who now find themselves stranded on an island (because I say so), Brendan and May. 

Every day, Brendan and May have 24 hours to do something. They decide that they want to spend 12 hours of their day sleeping, or doing other leisurely activities. That would leave 12 more hours to do work. Brendan and May realize they have 2 choices available for them. 

They can pick berries.

Or they can catch fish.

On the first day, they each spend six hours picking berries individually, and 6 hours catching fish individually. 

Their results looked like this:

Brendan picked 300 berries in 6 hours, and caught 24 fish in the next six hours. 

May picked 120 berries in 6 hours, and caught 42 fish. 

This time you might be saying, OK, Brendan will give may 90 berries, and May will give Brendan 9 fish, right? That way, they both will have 210 berries, and 33 fish? Wrong. 

When combined together, before each person takes half of the production, they picked 420 berries, and caught 66 fish. What if I told you that they could increase the amounts of fish caught AND berries picked? This is called comparative advantage. 

Since i picked an easy math equation, its easy to figure out who picks berries more efficiently, and who catches fish more efficiently. 

Brendan showed he can pick 50 berries in an hour, and catch 4 fish. 

May showed she can pick 20 berries per hour, but can catch 7 fish per hour. 

When put in these terms, its easy to see how Brendan is a lot better at picking berries per hour, and May is far better at catching fish. 

Day 2 comes, so Brendan decides to spend all 12 hours picking berries, and May decides to spend all 12 hours catching fish. The decision for each person to do what they do the best with the time they have and trading the extra they make is called specialization. 

As expected, their results are as follows:

Brendan picks 600 berries, and catches 0 fish. 

May picks 0 berries, and catches 84 fish. 

Now, they could split everything evenly, but May would still have just as many fish, and Brendan would have just as many berries as if they worked separately. So, they come to an agreement on a trade: 

Brendan will trade 200 berries, and May will trade 32 fish. 

Day 2 Totals (after specialization and trade):

Brendan: now has 400 berries and 32 fish. That's 100 more berries and 8 more fish than individually! 

May: now has 200 berries and 52 fish. That's 80 more berries and 10 more fish than before!

As you can see, through specialization and trade, countries (and individuals) who have different skills can spend time doing what they do best, and trading for what they do not as well, and still have more than they otherwise would, even in what they suck at doing!

What happens if one day, Brendan is stung by a Tentacool? He's feeling a little sick. 

On day 3 (for some reason) they go back to splitting their labor for 6 hours on each task. 

Day 3 Totals: 

Brendan (stung by the Tentacool) is only able to pick 240 berries, and catch 24 fish. Whereas May, who is healthy, is able to now pick 360 berries and catch 42 fish. 

We find ourselves with a problem. Brendan is going to be sick for a long time, it seems, and May is better at doing both things than Brendan. She can catch more fish per hour, and pick more berries. The heartless in you would think "See! May can now do everything better herself, now she doesn't need Brendan!" Not so, I say, I'll tell you why. 

Day 4 (Brendan is still sick): 

May does a little bit of math, and decides that Brendan is going to spend all 12 hours picking berries. May will also spend 2 hours picking berries of her own, but she'll still devote 10 hours to catching fish. 

The results (predictable) are as follows:

Brendan (still in his sick productivity) spends all 12 hours and picks 480 berries. 

May spends two hours to pick 120 berries, and of the other 10 hours, she catches 70 fish. 

They trade again, Brendan gives up 240 berries, and May gives up 26 fish. Now, they both have the same amount of berries with Brendan's sickness as before they traded, yet they each have two more fish than they otherwise would have. 

You see, even if your country is stronger and better at another country at absolutely everything that you do, it doesn't make sense for you to do everything yourself. There are still benefits for other countries to do other things for you. This is what comparative advantage is. 

The math in the Stung-by-a-Tentacool scenario is as follows (if you haven't figured it out yet). 

May can pick 60 berries per hour, and catch 7 fish per hour. Sick Brendan can pick 40 berries per hour, and catch 4 fish per hour. However, for each fish Brendan catches, he must give up 10 berries. For each fish May catches, she only gives up 8.57 berries. We see here, that it's cheaper for May to catch Fish than it is for Brendan to do it. 

It costs May 8.57 berries, and Brendan 10 berries. This is called opportunity cost, or the cost of giving up your other option to pursue the option you pick. 

Trade is good. Trade between countries is good. They both create more than they otherwise would have, and when they exchange the difference, both improve their lives. The more countries participating in this specialization, exchange, and division of labor, the better. 

We need more free trade, not less.