This opposition was grounded on the belief that machines created unemployment, for it seemed that fewer employees were needed to produce goods because of automation. The historic evidence, however, has refuted these fears. Machines have increased employment beyond all expectations, because by lowering the cost of goods to the consumer, they helped increase demand for those goods. Similarly, the principle of comparative advantage should be stressed again and again in order to illustrate the advantages of foreign trade. In order to understand this principle, it is important to grasp the fact that foreign trade is essentially like domestic trade.
Specialization occurs within any trading area.
It is common to observe that some areas of a country are identified with a particular industry. In the United States, for example, Detroit is associated with the automobile industry, Pittsburgh with the steel industry, Hollywood with the film industry, Seattle with the aerospace industry, and Dallas with oil. This specialization may be traced to different reasons, but it should be understood that the natural forces of the market have created this situation. On the other hand, there is no immutable law that perpetuates specific economic specialization in a given geographical area. New England, for example, used to be the textile center in America.