"Many economists occupied themselves with the problem of comparative advantage. The first known determination of the principle of comparative advantage and trade appears in an article by Robert Torrens in 1815, titled Essay on the External Corn Trade. Torrens describes the basic idea of absolute advantage as described by Adam Smith but in the end suggests that this simple intuition is not correct. David Ricardo transformed the idea using a simple numerical example in his 1817 book titled, On the Principles of Political Economy and Taxation.5

The theory of comparative advantage is often called the Ricardian Model. David Ricardo aimed to extend Adam Smith’s theory of division of labour to a worldwide scale, with each country specializing in those goods, which it could manufacture more efficiently. “Even if one country was more efficient than another country in the production of all goods, Ricardo showed that it could still gain by specializing in those goods in which its relative efficiency was greatest. It was said to have a comparative advantage in such goods.” 6 Then the benefits would be shared between the two countries through trade.

Besides the verbal definition Ricardo used a numerical example for the explanation of comparative advantage. The following figure shows the number of man-hours per unit required to produce cloth and wine in a two-country world including England and Portugal. Portugal has an advanced position to England in the production of these commodities. That means Portugal has an absolute advantage over England in the production of both cloth and wine."

Práce obsahuje tabulku.