Ricardo on Trade

This paper considers the context, the details and some of the criticisms levied against the well‐known numerical example of comparative advantage that David Ricardo set out in chapter 7 of his PRINCIPLES. Particular attention is paid to the distribution of the gains from trade, to the relative importance of static and dynamic factors and to the political dimensions of trade theory. The paper concludes by relating Ricardo's trade theory to current controversies over globalization, unequal exchange, Third World poverty and the existence of different varieties of capitalism.