> Specialization is a feature of global trade. Regions focus on specific industries to gain expertise and increase efficiency.
This is very comforting to regions that are specialized in high-cost, high-margin, high-technology products, and not very comforting to regions that specialize in low-cost, low-margin, low-technology products. The countries growing the bananas that go into your smoothies have specialized in growing bananas, but they aren't making any money from it.
They technically gain some with the niche over other options but certainly not the lion's share as they are very commoditized and not the bottleneck of scarcity at all. Shippers and retailers make more and it is far more expensive for them to get into it than to run their own local banana farm. Credit is also less accessible.
Low capital banana growers would do far worse if they tried to compete by growing grain crops in the region as they have to contend with high capital mechanized and chemical using operations with massively better yield and closer markets.
Specialization is at least a local maximia to them even if there are other options better in the long term. Take say West Virgina's coal mining vs a more diversified industry.
That’s a great point, but I don’t think theory says that you have to stay at the base level of your specialization. While not as high margin as the other industries, they could go up the value chain and start producing smoothie packets to make more money.
If they made great smoothies (in addition to growing bananas), then they wouldn’t be leaving that market to blond Californian influencers living in Bali.
Well, some of them tried to diversify but the country of the blond Californian sent tanks and the CIA to make sure that the correct parties get their slice and keep everyone else down.
This happened for bananas going into the smoothies, rubber going into tires (at the time), coffee going into lattés, oil going into tires (at a later time), etc
This is very comforting to regions that are specialized in high-cost, high-margin, high-technology products, and not very comforting to regions that specialize in low-cost, low-margin, low-technology products. The countries growing the bananas that go into your smoothies have specialized in growing bananas, but they aren't making any money from it.