We should distinguish between macro- and microeconomic failure. That's the lesson I take from this exchange between Frances and Tim.

Let's use Tim's barbecue metaphor. Comparative advantage requires that the idiot cousin - call him Kostas - does something mundane like shape the beef patties, whilst the skilled cook - call him Jurgen - does fancy things with the barbecue.

However, this might mean that Kostas doesn't have much to do. This'll be especially the case if Jurgen's on a diet and doesn't want to eat much.

There's a danger, therefore, of Kostas getting into trouble. Worse still, if Jurgen insists that Kostas only eats as much as he contributes to the barbecue, Kostas will be ill-fed.

What can we do about this?

We could plonk him in a deckchair and ply him with Pimms. But Jurgen hates idleness and doesn't want to see his Pimms go down the gullet of layabouts. Sure, his feelings are irrational. But he's a stubborn fellow and there's no shifting him.

Instead, Kostas might be able to beg for other menial jobs, but there's no reason to suppose this will be enough to keep him employed.The idea that people can get work if only they accept sufficiently demeaning conditions is a just-so story without historical or theoretical foundation.

Alternatively, Kostas could leave the barbecue. But it's not obvious he'll find a better one, and even if he can, the bus fare to get there will be expensive, and Jurgen might have to help pay it.

Instead, there's a simple answer here - to have a bigger barbecue. If Jurgen came off his diet and ate more burgers, there'd be more for Kostas to do.

The problem with our barbecue, therefore is a macro one, not a micro one. Jurgen and Kostas are doing the right jobs; there's no failure of comparative advantage. The problem is simply that the barbecue isn't big enough. What we have here is exactly the problem Keynes identified:

I see no reason to suppose that the existing system seriously misemploys the factors of production which are in use...When 9,000,000 men are employed out of 10,000,000 willing and able to work, there is no evidence that the labour of these 9,000,000 men is misdirected. The complaint against the present system is not that these 9,000,000 men ought to be employed on different tasks, but that tasks should be available for the remaining 1,000,000 men. It is in determining the volume, not the direction, of actual employment that the existing system has broken down.

Now, in saying this I don't mean that the theory of comparative advantage is correct. It isn't. There's less (pdf) trade in some ways than the theory predicts, and more trade within industries and between neighbouring countries. Some guy got a Nobel in 2008 for analyzing these issues.

What I do mean is that we don't need to reinvent the wheel. Some problems have a simple economic solution, and are not a sign that conventional economics is wrong. The problem with our barbecue is one of morality more than economics.