… but this is an econ post too. John Whitehead was kind to refer to our November lunch conversation in which we discovered a shared interest in cycling (to go along with our shared interests in economics, environmental economics, and beer). There are some ways that even individual recreational cycling reflects core economic ideas, particularly about specialization and comparative advantage (don’t even get me started on the economics and strategy of professional cycling …).
Take the duration of activity, for example. From exercise physiology we learn that we have differentiated muscle fibers, categorized roughly into fast twitch and slow twitch. Fast twitch are the muscle fibers that engage for quick bursts, working with the anaerobic energy system in sprints and other short but intense activities. Slow twitch are the muscle fibers that enable you to work aerobically, over long distances and durations. Different people possess these types of muscle fibers in different proportions (think of that as your initial endowment), and you can develop more of one or the other at the margin, but given your initial endowment, you are going to have a predisposition toward one or the other. Just as in talking about trade and exchange, this predisposition has a lot to do with comparative advantage.
More after the cut …The KP household illustrates this comparative advantage concept in a couple of ways. I am inherently a fast twitch gal, while the KP Spouse is more slow twitch. Not surprisingly, then, the sports in which I’ve always participated relatively successfully (short distance cycling, swimming (50m free, 50mback), downhill skiing, soccer, ice hockey) are those that benefit from a capacity for short, intense bursts of energy, while the KP Spouse has always been a cross-country and distance runner.
I’ve spent a lot of time and energy over the past several years developing my endurance and my slow twitch capability, and now can do century rides, the back-to-back weekend century TOMRV ride, multiple days in a row of 40+ mile rides, half ironman races, etc., all of which I really, really enjoy. Why mention that here? Because we do similar things in developing our human capital in a range of other ways as well, not just in our athletics. Whether it’s learning new ideas or learning to play an instrument or learning a new language, we humans generally have a desire for learning. We are constantly changing in our interests and our capabilities.
That means that our individual comparative advantages, what we do at relatively lower opportunity cost than others, is also constantly changing. Individually in economic exchange that will affect the types of trades that occur, and the range of terms of trade at which exchanges are mutually beneficial. Aggregate that up and you see changing trade patterns as people themselves change. One of the most beautiful things about market processes and how the price system parsimoniously communicates these changes is the fluidity of the adaptation to the underlying individual changes — no agency needs to decree a change in prices to reflect the change in the relative opportunity costs of the trading partners (indeed, they cannot aggregate all of the knowledge required to do so!). Comparative advantage changes over time and as human capital and technology change, and market processes enable those changes to benefit as many people as possible.