College Job
When I was in college the first job I got was that a donut shop. At first it seemed familiar because I had a job at a donut shop in high school except my job at the donut shop in high school was just showing up, working in the afternoon selling, donuts taking people’s money, giving them coffee. It was very easy.
When I worked at the donut shop in college I had to work the swing shift from 3 to 11. Because that was very slow that was a time where I had to make all the donuts for the next day. My boss at the donut shop was a very interesting person.
He had just got his bachelor’s degree in business and he was in the process of getting his MBA. The semester that I worked there he was in the process of writing this paper that he had to write for his first year which was about the history of trade.
Ancient Trade Ideas
He would always talk to me about these ideas. They’re all very interesting ideas because at the time I was a science student and really didn’t know much about business. One of the key important ideas from economics that goes way back even before the invented money is something called comparative advantage.
If you can imagine two tribes of people, one tribe that mainly hunts bears and the other tribe that mainly catches fish. They would both be better off if they met occasionally and traded bears for fish or bearskin’s for fish or bear meat for fish. If they each focused on doing what they do best and then meet occasionally to trade with each other they will both be better off than if they try to do both of those things themselves.
The tribe that hunts only bears, if they tried hunt bears and catch fish there would be worse off than if they only hunted bears and they would meet and trade their bears for fish. Similarly the tribe that only caught fish if they tried to catch fish and hunt bears there would be much worse off they would get a lot less stuff for a lot more effort than if they only spent their efforts catching fish and then trading some of those fish or bearskins or bear meat.
Adam Smith Labeled It
This is a very important concept that a lot of people don’t really see. Adam Smith was the first person to notice this and I think he’s the one that they came up with a label, “comparative advantage” and he talked about that in his book the Wealth of Nations that he published in 1776.
He was writing this paper on the history of trade and he said that if you look back through civilizations you can tell which societies will be successful and which societies will not be successful. The ones that will be the most successful are the ones that are most open to trade both within their society and with other societies.
If you look back in the times of human history were humans were the most profitable and there was the most technological advances this is when the trade between different empires was the most open. The two times in ancient history with this happened was with the Silk Roads.
Silk Road Flow
There are two times when the Silk Road worked which was essentially was an open trade route between China and Europe and the Middle East and the Indus Valley. When the Silk Road was the most open this was when there was the most trade in between all these different empires in Eurasia.
This is the one thing that allowed Marco Polo to travel from Italy all the way to China. He didn’t do that on his own he did that because there were so many open roads of trade between these kingdoms.
If you look back historically you’ll see that societies tend to shut down when they close off trade with other societies and they tend to flourish when they open up trade with other societies. It’s kind of a modern idea or it seems like a modern idea for countries to strives for self-sufficiency.
Goods Trade – Societies Flourish
That they could have this idea that they can produce all they need within their own borders. But in reality this is a very very dangerous idea. This inevitably leads to economic collapse.
Any time in history were countries have tried to close themselves off and become self-sufficient this is almost always led to some type of catastrophic event either an economic collapse or an all-out war.
Whenever I would come in this guy would tell me about his his recent learnings in business while I was getting ready to make the donuts. Part of the interesting part about working at this donut shop was while I was in the back making all the donuts these really strange characters would come in off the street.
Alien Abduction Stories
This donut shop was kind of downtown in a sketchy area and so all these strange people would come in off the street that would tell me these really strange stories about ghosts and alien abductions. All the stuff that people like that and think of. It was definitely very very interesting job for a lot of reasons.
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