An Astonishing Turn in the Attribution Debate on the Law of Comparative Advantage

The law of comparative advantage cannot be attributed to David Ricardo, James Mill, Robert Torrens or John Stuart Mill. Their writings, much like those of Adam Smith, strictly adhere to the classical rule for specialization, which asserts that one should acquire commodities abroad whenever offered cheaper than it would cost to produce them locally. They all viewed the cheaper price of foreign commodities as the logical starting point and condicio sine qua non of most exchanges between countries. Furthermore, the popular narrative about Ricardo’s alleged formulation of an alternative rule for specialization – the law or principle of comparative advantage – results from a misinterpretation of the well-known numerical example presented in Chapter 7 of his Principles of Political Economy and Taxation. John Stuart Mill is largely responsible for this misinterpretation; he obviously deserves no recognition or praise for that.