In this example it is assumed that the entire island is literally owned by one person. So, if you wish, this person may be a metaphor for a strong centralized government. Destroying your production capacity is a strategic mistake, and exposes you to blackmail in the future. A smart owner (or a smart centralized government) would not let that happen. If you want to give me free bananas, okay, I will take them; but I will still keep my banana plantation ready. That way, I get free bananas today and keep my ability to produce bananas tomorrow. (And the other side of the same coin is that a smart owner -- or centralized government -- will try to expand their future production capacities. For example, if today it is for me more profitable to grow bananas than to write computer software, I might strategically decide to write software anyway, at least part-time, because two or three years later my software-writing skills are likely to increase dramatically, while my banana-growing skills would probably remain the same. So the comparative advantage of tomorrow may reward me for writing software, but in order to get there, I need to accept some disadvantage today.) That said, another question is whether subsidies are the best way to keep your production capacity, and what amount of subsidies is optimal. (Of course, the farmers will always say "more is better" for obvious reasons.) If we discuss real-life agriculture, I would even challenge which types of products should we subsidize: if the goal is to prevent starving, we probably do not need to protect our meat production -- if the other countries keep giving us cheap meat, let them; and if they suddenly stop doing that (in the unlikely case that all meat-subsidizing countries would coordinate to do this in the same year), we may have a year or two of mostly vegetarian diet, but no one is going to die. In other words, although some protection of production capacity is strategically important, it doesn't necessarily foll