Should Rory McIlroy whack his own weeds? The swinging skills that make Rory McIlroy one of the world’s best golfers also make him a skillful weed whacker. His large estate has a lot of weeds, and it would take the best gardener 20 hours to take care of all of them. With his powerful and precise swing, Rory could whack down all the weeds in just one hour. Since Rory is 20 times more productive than the best gardener, should he take care of his own weeds?

We can use the principle of voluntary exchange to explain why Rory should hire the less productive gardener. Suppose Rory earns $1,000 per hour playing golf—either playing in tournaments or giving lessons. For Rory, the opportunity cost of weed whacking is $1,000—the income he sacrifices by spending an hour cutting weeds rather than playing golf. If the gardener charges $10 per hour, Rory could hire him to take care of the weeds for only $200. By switching one hour of his time from weed-whacking to golf, Rory earns $1,000 and incurs a cost of only $200, so he is better off by $800. Rory McIlroy specializes in what he does best, and then buys goods and services from other people.

Question.

What is the rationale for specialization and exchange?

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