Ricardo’s comparative-advantage case targeted profit, not welfare.

Evidence

Ricardo’s argument from what was later known as comparative advantage addressed the rate of profit, not popular welfare; economic liberty was merely a condition for the realization of comparative advantages. Economic liberty was central to Smith’s arguments, but not to those of Ricardo. Moreover, Ricardo couched his argument in terms of the trade between England and Portugal in wine and wool (the Methuen Treaty of 1703), making it very easy for nonspecialists to confuse comparative with absolute advantage. This confusion has since been intrinsic to all public discussion of the gains from international trade. — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin, 391

Categorization

  • XREF: The wine-and-wool framing causing persistent comparative/absolute confusion is a classic economics literacy point worth preserving. — connects to: Marx’s concept of necessity derives from Ricardo’s determined market, not natural science — Antonio Gramsci, Selections from the Prison Notebooks, 1459; The system’s usefulness claim masks that production serves profit not need; The profit motive becomes invisible second nature through its universalization — Fredric Jameson, Postmodernism, or, The Cultural Logic…, 754
  • corroborated: 2 independent passages support this claim — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin: The Making…, 391

Broader Connections