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> an idea that sounds stupid on its face It still sounds stupid on its face. As I recall, Ricardo said England produced textiles, and Portugal produced wine,
by Ologn 13y ago
> an idea that sounds stupid on its face
It still sounds stupid on its face. As I recall, Ricardo said England produced textiles, and Portugal produced wine, and both countries were each economically better off for their own specialization.
Joan Robinson revisited this idea a century later and asked, how did that turn out economically for Portugal, which remained a backward, agriculturally based nation while England began an industrialization program, partly based around the industrialization of its textile industry?
- tokenadult 13y agoThe late Joan Robinson produced some interesting writings[1] but there are few economists indeed who credit her with proving Ricardo wrong about comparative advantage. That's because in fact her writings about Ricardo's ideas focused on different issues, and Ricardo was and is right that each party in free trade enjoys comparative advantage in trade with the other party. Economic growth through free trade has been the path to prosperity for Taiwan (where I have lived), Hong Kong (where I have visited more than once), and quite a few other countries all around the world. Portugal's economy during the years she studied was not characterized by following Ricardo's advice. [1] http://www.econlib.org/library/Enc/bios/Robinson.html http://www.econlib.org/library/Enc/bios/Robinson.html