Specialization and Trade: Because We Can’t Be Good At Everything
Professor Art Carden is able to mow his yard, build a fence, and install a faucet all at the same time. How? He does this by specializing through trade. Rather than try to do those things himself—especially since he isn’t very good at doing them—he uses the money he earns doing what he specializes in to pay others to mow his yard, build a fence for him, and install a faucet.
By employing others to do this work, Prof. Carden benefits because he can spend more time doing what he does best. He may also have more free time available because he does not have to use his spare time to mow his lawn, for example. At the same time, the people he hires to do the work around his house also benefit. They earn money working for him and are able to do what they specialize in, instead of having to spend too much of their time doing other things.
Even if Wes, the man who mows Prof. Carden’s grass, is able to mow lawns and prepare economics lectures faster than Prof. Carden is able to do them, it still may be beneficial to trade. In the example that Prof. Carden uses to illustrate this, both he and Wes save thirty minutes by trading instead of each doing the same work. This frees up valuable time for them to spend as they please. This is a small example to show some of the logic behind a key principle in economics: Trade creates wealth.