Computer Programming Comparison

Consider the current situation: like their counterparts in the United States, engineers and technicians in India have the capacity to provide both computer programming and innovative new technologies. Indian programmers and high-tech engineers earn one-quarter of what their counterparts earn in the United States; Consequently, India is able to do both jobs at a lower dollar cost than the United States: India has an absolute advantage in both. In other words, it can produce a unit of programming for fewer dollars than the United States, and it can also produce a unit of technology innovation for fewer dollars. Does that mean that the United States will lose not only programming jobs but also innovative technology jobs, too? Does that mean that our standard of living will fall if the United States and India engage in international trade? David Ricardo would have answered no to both questions - as we do today. While India may have an absolute advantage in both activities, that fact is irrelevant in determining what India or the United States will produce. India has a comparative advantage in doing programming in part because such activity requires little physical capital.