Beware of comparisons

A friendly conversation with a friend of mine ended with me noticing a problem with so much information we get today. Economics is about efficiently allocating scare resources(all resources are scare) which have alternative uses. Meaning lets get what we need where me MOST need it as quickly and as cheaply as we can....

However understand that efficiency is different in different places. Let me explain by explain: My friend was arguing for America to use more cheap uses of power such as solar and wind. He cited that in Europe they have a couple places where wind is used to power large portions of cities. I have not looked up to concur this is the situation but even if it is, it can have zero relevance to our situation here in America.

Just as different parts of our country are powered differently (water in Vegas, Coal in the South, Oil in the NE) so is the rest of the world based on different resources. Europe can claim that Americans are inefficient at agriculture because they in Europe produce more food per acre than we do in America. But we can argue that our farmers produce more per farmer than they do in Europe. Each continent is both efficient in different ways. Europe has less land available for use and thus it is more efficient to spend more time on each acre getting all that you can out of the available land. WHile in America it makes since for the farmer to fly by rocks and not worry as much about weeds since we have so much land that can be used. Thus the efficiencies are far different.

Third world countries get more work done with a given amount of capital because they use the capital more than we do in America. But that is because in a rich nation like America we have more capital to use and our labor is far more expensive. Let me explain. In America it makes sense for a truck driver to drive his trailor to a location and let it sit until morning to be unloaded by workers who arrive for their "morining" shift. He can attach his truck to another trailor and continue on. In a third world country they would have workers waiting for trucks to arrive and immediately unload them. Why the difference? America has more access to capital than third-world countries and third-world countries have cheaper labor costs as compared to America. So while the trailor sits idle till morning in America, poor nations have to get in unloaded quickly to then be used very soon after.

The point it that different nations have different situations. It makes sense that Europe would have more public transportation and use less oil and gasoline than in America because they have far less land but have 100,000,000 more people than America does. So the population is more dense and thus they can spread out the costs to far more people when they ride public transportation. We in America have to drive more because there are not enough people in Knoxville and Crossville to have a train of some sort connecting the two cities. Thus we drive. Furthermore our roads and highways, while built really well are high speed roads and have lots of hills. IE: drive from Crossville to Knoxville. If I'm making that trip I want to be in a SUV for protection purposes not some environmentally friendly 50 miles to the gallon car that many in Europe can use. And lastly if we do not have the English Channel to generate wind but have tons of coal, it makes sense for us to use coal and let europeans use more wind energy than us. Our efficiencies are based on available resources.

Our efficiencies are different based on our circumstances and resources. So when you hear professors, teachers, media, politicians, or even parents talk about "well in Europe they do this and its good why are we behind?" Its often that we are not behind... its that those individuals are behind on their understanding of economics and geography differences.