This paper examines if the law of comparative advantage really was discovered by David Ricardo. It investigates the arguments against and for David Ricardo’s discovery made by three modern authors, Thweatt (1976), Ruffin (2002), and Gehrke (2015). It analyzes and evaluates the argumentation made by these authors in order to identify the most compelling interpretation of Ricardo’s discovery.
Thweatt argues that Ricardo’s writing about comparative advantage was probably not his own. Thweatt claims that Ricardo probably took the concept of comparative advantage from Mill.
In contrast, Ruffin states that there is evidence that Ricardo very well discovered comparative advantage on his own. Ruffin’s key evidence for this argumentation are three letters, which should indicate that Ricardo worked out comparative advantage during October 1816.
Finally, Gehrke claims that Ruffin’s interpretation of the three letters is not solid. According to Gehrke, there is no evidence that Ricardo really worked out comparative advantage.
Table of Contents
1. Introduction
2. Arguments against Ricardo`s discovery
3. Arguments for Ricardo`s discovery
4. Revision of Arguments for Ricardo`s discovery
5. Evaluation and conclusion
Research Objectives and Themes
The primary objective of this paper is to critically evaluate the conflicting academic interpretations regarding the discovery of the law of comparative advantage by David Ricardo, specifically by analyzing the competing arguments of Thweatt, Ruffin, and Gehrke.
- Historical debate over the authorship of comparative advantage.
- Evaluation of Thweatt’s critique regarding Ricardo's limited focus on absolute advantage.
- Analysis of Ruffin’s interpretation of Ricardo's correspondence from 1816.
- Examination of Gehrke’s rebuttal concerning the context of Ricardo's letters and notes.
- Synthesis of evidence regarding whether Ricardo fully grasped the concept in his writings.
Excerpt from the Book
2. Arguments against Ricardo`s discovery
Let us begin with the arguments against Ricardo`s discovery. Thweatt argues that Ricardo did not discover comparative advantage because Ricardo barely mentioned comparative advantage in his works Essay on Profits and Principles (Cf. Thweatt (1976), p. 216). Thweatt believes that Ricardo mainly discusses the concept of absolute advantage in the books. Ricardo supported free trade solely as a substitute for the shortage of land. As the amount of land is limited in each country, agriculture and thus the whole economy is limited in its growth. Thweatt argues that Ricardo hence justified foreign trade especially for low and constant priced food which acts as a substitute for land. Thus, the country could avoid its natural limit and the economy is able to expand further. In this context the reason for international trade could be formulated as an absolute cost advantage. Thweatt furthermore argues that Ricardo`s view of foreign trade could in all of his works be explained with absolute advantage. The only exception are three paragraphs in the Principles, which will be analyzed later (Cf. Thweatt (1976), pp. 217-218).
According to Thweatt, another argument against Ricardo discovering comparative advantage is that Ricardo did not advocate for free trade in general. In his 1815 published Essay on Profits, Ricardo supported free trade only for countries which are already wealthy and only in the case of the Corn Laws (Cf. Thweatt (1976), pp. 218-219). Thweatt further argues that this opinion did not change when Ricardo published his Principles in 1817. Ricardo wanted free trade only for cheap importable wage-goods which would strengthen industrialization. He wanted England, which was the most developed country in Europe, to be able to easily import goods which would lower wages and raise profits. These goods might have been raw materials or food, but not luxury goods. Thus, according to Thweatt, Ricardo was in favor of free trade only because he assumed that England had an absolute advantage (Cf. Thweatt (1976), p. 219).
Summary of Chapters
1. Introduction: This chapter introduces the controversy surrounding David Ricardo's discovery of the law of comparative advantage and outlines the positions of the three main scholars analyzed in the paper.
2. Arguments against Ricardo`s discovery: This chapter details Thweatt's argument that Ricardo focused primarily on absolute advantage and did not fully understand or promote the theory of comparative advantage.
3. Arguments for Ricardo`s discovery: This chapter presents Ruffin's evidence, based on three letters from 1816, suggesting that Ricardo had indeed identified the principle of comparative advantage.
4. Revision of Arguments for Ricardo`s discovery: This chapter outlines Gehrke's critique of Ruffin, arguing that the context of Ricardo's correspondence does not support the claim that he was discussing comparative advantage.
5. Evaluation and conclusion: This chapter summarizes the findings, suggesting that the evidence for Ricardo’s original discovery is weak and warrants further investigation into other potential contributors.
Keywords
David Ricardo, Comparative Advantage, Absolute Advantage, Economic Theory, History of Economic Thought, International Trade, Principles of Political Economy, Free Trade, Corn Laws, Wage-goods, Factor Price Equalization, Thweatt, Ruffin, Gehrke, Economic History
Frequently Asked Questions
What is the core subject of this paper?
The paper examines the historical debate surrounding the attribution of the discovery of the law of comparative advantage to David Ricardo.
Which scholars are central to the discussion?
The work focuses on the conflicting academic interpretations provided by William Thweatt, Roy Ruffin, and Christian Gehrke.
What is the primary research objective?
The goal is to determine whether there is sufficient evidence that Ricardo truly "discovered" the concept, or if this attribution is historically inaccurate.
What research methodology is employed?
The author uses a critical literature review and qualitative analysis of historical texts and correspondence to evaluate the validity of competing arguments.
What does the main body of the text cover?
The body covers arguments against Ricardo's discovery, arguments for it based on his 1816 correspondence, and a critical revision of those interpretations.
Which keywords best describe this study?
Key terms include David Ricardo, Comparative Advantage, History of Economic Thought, International Trade, and economic historical criticism.
How does Thweatt explain Ricardo’s stance on trade?
Thweatt argues that Ricardo’s support for free trade was primarily based on absolute advantage and was limited to specific goods like food to overcome land constraints.
What evidence does Ruffin use to support Ricardo?
Ruffin points to three specific letters written by Ricardo in the fall of 1816 to Malthus and Mill as evidence that he was working on comparative advantage.
Why does Gehrke challenge Ruffin’s interpretation?
Gehrke claims that Ruffin ignores the context of the letters, suggesting they discuss internal economic factors rather than international comparative trade models.
What is the final conclusion reached by the author?
The author concludes that there is no solid evidence for Ricardo’s discovery, suggesting the concept may have originated from others or was not fully grasped by Ricardo.
- Citation du texte
- Korbinian Stinglhamer (Auteur), 2016, Did David Ricardo discover comparative advantage?, Munich, GRIN Verlag, https://www.grin.com/document/377205
