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Comparative advantage would be stretched to the breaking point ...

The concept of comparative advantage explains why trade makes sense even if the more advanced civilizazion is better at everything.

• Say the advanced civilization spends 1 person-hour to produce a leather belt, and 2 person-hours for a cup of porcelain.
• The primitive civilization, being less efficient, spends 10 person-hours for a leather belt, and 100 person-hours for a cup of porcelain (getting the temperatures and glazes right is quite difficult for them).

So if a leader of the primitive culture insists on fine pottery on the table, he or she could go to a local merchant and pay the value of 10 leather belts, or to the alien trader and pay the value of 2 leather belts. And if a consumer in the advanced consumer wants a leather belt, he or she could go to a local merchant and pay the value of 0.5 cups of porcelain, or to the alien trader and pay the value of 0.1 cups of porcelain.

Both sides benefit when each do what they do better. For leather belts, the ratio is 1-10. For fine pottery, it is 1-50. Both sides benefit if the primitives do all the leather belts, and the advanced people to all the fine pottery.

Now get the traders in there. Imagine a market on the primitive world where a leather belt trades for 1 copper coin and a fancy cup trades for 10 copper coins. And a market on the advanced world, where a leather belt trades for 1 digital credit unit while a porcelain cup is 2 digital credit units.

The traders borrow 100 digital credit units on the advanced world. They buy 50 cups and travel to the primitive world. There they sell them for 500 copper coins and buy 500 belts. (The ratio between leather and porcelain on the primitive world is 1-10. 50 cups buy 500 belts.) Now they travel home and sell those belts for 500 digital credit units. 100 of those go to repay the principal of the loan. 400 digital credit units are left for interest, transportation, wages, and profits.

The traders might also ask for less than 10 copper coins for each cup, and offer to pay more than 1 copper coin for each belt, to assure that they can fill their cargo holds without waiting. The reverse on the advanced world. Repeat a few times, and potters on the primitive world become tanners and leatherworkers, tanners and leatherworkers on the advanced world become potters. A mutually profitable trade develops.

Note that this does not require that the primitives are better than the advanced workers at any one thing. It only requires that the ratios in which they are worse differs from one sector of the economy to the next, and that some of their products remain useful in the advanced economy.

Comparative advantage would be stretched to the breaking point ...

The concept of comparative advantage explains why trade makes sense even if the more advanced civilizazion is better at everything.

• Say the advanced civilization spends 1 person-hour to produce a leather belt, and 2 person-hours for a cup of porcelain.
• The primitive civilization, being less efficient, spends 10 person-hours for a leather belt, and 100 person-hours for a cup of porcelain (getting the temperatures and glazes right is quite difficult for them).

So if a leader of the primitive culture insists on fine pottery on the table, he or she could go to a local merchant and pay the value of 10 leather belts, or to the alien trader and pay the value of 2 leather belts. And if a consumer in the advanced society wants a leather belt, he or she could go to a local merchant and pay the value of 0.5 cups of porcelain, or to the alien trader and pay the value of 0.1 cups of porcelain.

Both sides benefit when each do what they do better. For leather belts, the ratio is 1-10. For fine pottery, it is 1-50. Both sides benefit if the primitives do all the leather belts, and the advanced people to all the fine pottery.

Now get the traders in there. Imagine a market on the primitive world where a leather belt trades for 1 copper coin and a fancy cup trades for 10 copper coins. And a market on the advanced world, where a leather belt trades for 1 digital credit unit while a porcelain cup is 2 digital credit units.

The traders borrow 100 digital credit units on the advanced world. They buy 50 cups and travel to the primitive world. There they sell them for 500 copper coins and buy 500 belts. (The ratio between leather and porcelain on the primitive world is 1-10. 50 cups buy 500 belts.) Now they travel home and sell those belts for 500 digital credit units. 100 of those go to repay the principal of the loan. 400 digital credit units are left for interest, transportation, wages, and profits.

The traders might also ask for less than 10 copper coins for each cup, and offer to pay more than 1 copper coin for each belt, to assure that they can fill their cargo holds without waiting. The reverse on the advanced world. Repeat a few times, and potters on the primitive world become tanners and leatherworkers, tanners and leatherworkers on the advanced world become potters. A mutually profitable trade develops.

Note that this does not require that the primitives are better than the advanced workers at any one thing. It only requires that the ratios in which they are worse differs from one sector of the economy to the next, and that some of their products remain useful in the advanced economy.

Comparative advantage would be stretched to the breaking point ...

The concept of comparative advantage explains why trade makes sense even if the more advanced civilizazion is better at everything.

• Say the advanced civilization spends 1 person-hour to produce a leather belt, and 2 person-hours for a cup of porcelain.
• The primitive civilization, being less efficient, spends 10 person-hours for a leather belt, and 100 person-hours for a cup of porcelain (getting the temperatures and glazes right is quite difficult for them).

So if a leader of the primitive culture insists on fine pottery on the table, he or she could go to a local merchant and pay the value of 10 leather belts, or to the alien trader and pay the value of 2 leather belts. And if a consumer in the advanced consumer wants a leather belt, he or she could go to a local merchant and pay the value of 0.5 cups of porcelain, or to the alien trader and pay the value of 0.1 cups of porcelain.

Both sides benefit when each do what they do better. For leather belts, the ratio is 1-10. For fine pottery, it is 1-50. Both sides benefit if the primitives do all the leather belts, and the advanced people to all the fine pottery.

Now get the traders in there. Imagine a market on the primitive world where a leather belt trades for 1 copper coin and a fancy cup trades for 10 copper coins. And a market on the advanced world, where a leather belt trades for 1 digital credit unit while a porcelain cup is 2 digital credit units.

The traders borrow 100 digital credit units on the advanced world. They buy 50 cups and travel to the primitive world. There they sell them for 500 copper coins and buy 500 belts. (The ratio between leather and porcelain on the primitive world is 1-10. 50 cups buy 500 belts.) Now they travel home and sell those belts for 500 digital credit units. 100 of those go to repay the principal of the loan. 400 digital credit units are left for interest, transportation, wages, and profits.

The traders might also ask for less than 10 copper coins for each cup, and offer to pay more than 1 copper coin for each belt, to assure that they can fill their cargo holds without waiting. The reverse on the advanced world. Repeat a few times, and potters on the primitive world become tanners and leatherworkers, tanners and leatherworkers on the advanced world become potters. A mutually profitable trade develops.

Note that this does not require that the primitives are better than the advanced workers at any one thing. It only requires that the ratios in which they are worse differs from one sector of the economy to the next.

Comparative advantage would be stretched to the breaking point ...

The concept of comparative advantage explains why trade makes sense even if the more advanced civilizazion is better at everything.

• Say the advanced civilization spends 1 person-hour to produce a leather belt, and 2 person-hours for a cup of porcelain.
• The primitive civilization, being less efficient, spends 10 person-hours for a leather belt, and 100 person-hours for a cup of porcelain (getting the temperatures and glazes right is quite difficult for them).

So if a leader of the primitive culture insists on fine pottery on the table, he or she could go to a local merchant and pay the value of 10 leather belts, or to the alien trader and pay the value of 2 leather belts. And if a consumer in the advanced consumer wants a leather belt, he or she could go to a local merchant and pay the value of 0.5 cups of porcelain, or to the alien trader and pay the value of 0.1 cups of porcelain.

Both sides benefit when each do what they do better. For leather belts, the ratio is 1-10. For fine pottery, it is 1-50. Both sides benefit if the primitives do all the leather belts, and the advanced people to all the fine pottery.

Now get the traders in there. Imagine a market on the primitive world where a leather belt trades for 1 copper coin and a fancy cup trades for 10 copper coins. And a market on the advanced world, where a leather belt trades for 1 digital credit unit while a porcelain cup is 2 digital credit units.

The traders borrow 100 digital credit units on the advanced world. They buy 50 cups and travel to the primitive world. There they sell them for 500 copper coins and buy 500 belts. (The ratio between leather and porcelain on the primitive world is 1-10. 50 cups buy 500 belts.) Now they travel home and sell those belts for 500 digital credit units. 100 of those go to repay the principal of the loan. 400 digital credit units are left for interest, transportation, wages, and profits.

The traders might also ask for less than 10 copper coins for each cup, and offer to pay more than 1 copper coin for each belt, to assure that they can fill their cargo holds without waiting. The reverse on the advanced world. Repeat a few times, and potters on the primitive world become tanners and leatherworkers, tanners and leatherworkers on the advanced world become potters. A mutually profitable trade develops.

Note that this does not require that the primitives are better than the advanced workers at any one thing. It only requires that the ratios in which they are worse differs from one sector of the economy to the next, and that some of their products remain useful in the advanced economy.

Comparative advantage would be stretched to the breaking point ...

The concept of comparative advantage explains why trade makes sense even if the more advanced civilizazion is better at everything.

• Say the advanced civilization spends 1 person-hour to produce a leather belt, and 2 person-hours for a cup of porcelain.
• The primitive civilization, being less efficient, spends 10 person-hours for a leather belt, and 100 person-hours for a cup of porcelain (getting the temperatures and glazes right is quite difficult for them).

So if a leader of the primitive culture insists on fine pottery on the table, he or she could go to a local merchant and pay the value of 10 leather belts, or to the alien trader and pay the value of 2 leather belts. And if a consumer in the advanced consumer wants a leather belt, he or she could go to a local merchant and pay the value of 0.5 cups of porcelain, or to the alien trader and pay the value of 0.1 cups of porcelain.

Both sides benefit when each do what they do better. For leather belts, the ratio is 1-10. For fine pottery, it is 1-50. Both sides benefit if the primitives do all the leather belts, and the advanced people to all the fine pottery.

Comparative advantage would be stretched to the breaking point ...

The concept of comparative advantage explains why trade makes sense even if the more advanced civilizazion is better at everything.

• Say the advanced civilization spends 1 person-hour to produce a leather belt, and 2 person-hours for a cup of porcelain.
• The primitive civilization, being less efficient, spends 10 person-hours for a leather belt, and 100 person-hours for a cup of porcelain (getting the temperatures and glazes right is quite difficult for them).

So if a leader of the primitive culture insists on fine pottery on the table, he or she could go to a local merchant and pay the value of 10 leather belts, or to the alien trader and pay the value of 2 leather belts. And if a consumer in the advanced consumer wants a leather belt, he or she could go to a local merchant and pay the value of 0.5 cups of porcelain, or to the alien trader and pay the value of 0.1 cups of porcelain.

Both sides benefit when each do what they do better. For leather belts, the ratio is 1-10. For fine pottery, it is 1-50. Both sides benefit if the primitives do all the leather belts, and the advanced people to all the fine pottery.

Now get the traders in there. Imagine a market on the primitive world where a leather belt trades for 1 copper coin and a fancy cup trades for 10 copper coins. And a market on the advanced world, where a leather belt trades for 1 digital credit unit while a porcelain cup is 2 digital credit units.

The traders borrow 100 digital credit units on the advanced world. They buy 50 cups and travel to the primitive world. There they sell them for 500 copper coins and buy 500 belts. (The ratio between leather and porcelain on the primitive world is 1-10. 50 cups buy 500 belts.) Now they travel home and sell those belts for 500 digital credit units. 100 of those go to repay the principal of the loan. 400 digital credit units are left for interest, transportation, wages, and profits.

The traders might also ask for less than 10 copper coins for each cup, and offer to pay more than 1 copper coin for each belt, to assure that they can fill their cargo holds without waiting. The reverse on the advanced world. Repeat a few times, and potters on the primitive world become tanners and leatherworkers, tanners and leatherworkers on the advanced world become potters. A mutually profitable trade develops.

Note that this does not require that the primitives are better than the advanced workers at any one thing. It only requires that the ratios in which they are worse differs from one sector of the economy to the next.