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How Would David Ricardo Have Taught The Principle Of Comparative Advantage

Author

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  • Andrea Maneschi

    () (Vanderbilt University, Department of Economics)

Abstract

If David Ricardo had lived beyond the age of 51, how might he have delivered a lecture on comparative advantage? I argue that Ricardo infers the direction of comparative advantage and the size of the gains from trade by interpreting the four numbers in his Principles of Political Economy and Taxation for cloth and wine traded between England and Portugal as amounts of labor embodied in the quantities actually traded. He illustrates diagrammatically the gains from trade as the overall labor that England would save if it were to liberalize wheat imports by repealing the Corn Laws. Postulating a concave production function for wheat, Ricardo also depicts the concomitant rise in the profit rate, describing it as an equally important contemporary gain from trade for England. His interpretation differs radically from the textbook versions of the “Ricardian trade model,” and suggests a more authentic way of presenting the principle of comparative advantage.

Suggested Citation

  • Andrea Maneschi, 2008. "How Would David Ricardo Have Taught The Principle Of Comparative Advantage," Southern Economic Journal, Southern Economic Association, vol. 74(4), pages 1167-1176, April.
  • Handle: RePEc:sej:ancoec:v:74:4:y:2008:p:1167-1176
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    Cited by:

    1. Jorge Morales Meoqui, 2017. "Ricardo's Numerical Example Versus Ricardian Trade Model: a Comparison of Two Distinct Notions of Comparative Advantage," Economic Thought, World Economics Association, vol. 6(1), pages 35-55, March.
    2. Harzing, Anne-Wil & Giroud, Axèle, 2014. "The competitive advantage of nations: An application to academia," Journal of Informetrics, Elsevier, vol. 8(1), pages 29-42.
    3. Jorge Morales Meoqui, 2014. "Reconciling Ricardo's Comparative Advantage with Smith's Productivity Theory," Economic Thought, World Economics Association, vol. 3(2), pages 1-21, September.
    4. Robert Lepenies, 2014. "Economists as political philosophers : a critique of normative trade theory," RSCAS Working Papers 2014/11, European University Institute.

    More about this item

    JEL classification:

    • B1 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925
    • B3 - Schools of Economic Thought and Methodology - - History of Economic Thought: Individuals
    • F10 - International Economics - - Trade - - - General

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