Computer Programmers and Comparative Advantage

An article by Bill Belew of PanAsianBiz about the ACM International Collegiate Programming Contest reveals some interesting results; the winner was a Russian team from Saratov State University, and teams from China, Japan, Korea, and Singapore were ahead of an American team from MIT -- which placed twelfth. The facts are clear; now the question is how we should respond to them as either observers or participants. I will explain two different positions on this issue; one is the view of Dr. Belew. The other is the stance of a free-market economist.

Dr. Belew views the results as a sign that America is falling behind other countries in the skills of its programmers-which threatens to endanger economic opportunities in the future. India and China each produce triple the engineering graduates that the U.S. does-and this in itself is a deterrent to American programmers. "Why bother" -- they would ask -- "if the Indians and Chinese and Russians would outcompete us anyway?" This, according to Dr. Belew, is a self-reinforcing phenomenon: the American students' lack of confidence in their success means that they are less likely to try as hard as aspiring Chinese or Indians or Russians.

There is a competing view, however, which does not view this development as negative at all. The free-market economists hold this view. It arises from David Ricardo's Law of Comparative Advantage: individuals and countries alike are better off when each individual specializes in what he does best and lets other individuals -- including foreigners -- take care of everything else. Associating thus, people would have the goods or services they produce best in their possession; they would be able to exchange them on a free market for any other goods or services they desire that somebody else will produce.