Judging from comments on my North Dakota post, there’s a lot of confusion about when and why differences in scale make comparisons between economies invalid.

The crucial thing to get is that size per se isn’t the issue; it’s whether what is going on in the small economy could be replicated in the large economy.

I mean, we all know that airplane designs can be tested with miniature models in wind tunnels, that tsunamis can be modeled in tanks that fit in a (large) room, and so on. Small-scale versions of big phenomena are perfectly OK. The baby-sitting coop teaches us a lot about the global economic slump.

But when you’re looking at, say, a resource boom — which is what North Dakota is all about — you have to ask whether a comparable resource boom is possible in a much more populous state, or the United States as a whole. One commenter declared that there’s as much oil under California as there is under North Dakota; quite possibly. The question is, how big a deal would extracting that oil be in a state with 50 times North Dakota’s population; how much difference would it make to, say, the state unemployment rate? And the answer of course is virtually none. To have a North Dakota-type boom in California you’d have to find 50 times as much oil; to have it nationally you’d have to find 500 times as much. Not likely.

And this is how you want to think about other examples. Is Iceland too small to be a useful model for other crisis countries? Well, it could be; Iceland’s export sector is, thanks to its small size, not very diverse, and if the recovery had been all about fish, or aluminum, it wouldn’t be much of a lesson to anyone else. As it happens, however, that’s not what it’s about.

I guess the general point is that when trying to learn from some country or region’s experience, you should always ask, “Is this place a reasonably good model for other places?” It’s not a matter of head counts or acreage, it’s about the story.