Who Developed the Law of Comparative Advantage?


Quick Answer

The law of comparative advantage was formally developed by British political economist David Ricardo. Ricardo was a successful stockbroker and served as a Member of Parliament for the final four years of his life. His ideas greatly influenced the development of economics as a science.

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Full Answer

The law of comparative advantage argues that international trade benefits everyone, even if one country has an absolute advantage at producing all goods. In Ricardo's example, Portugal can produce wine and cloth more cheaply than Britain. However, he argued, if Britain focuses on manufacturing cloth and Portugal on wine, then both countries are able to consume more of each item if they engage in free trade.

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