<p>One of the most common critiques is that the standard model is a static analysis.  While a country might be better off today by focusing on its comparative advantage, its longer term prospects depend on the future of that industry, particularly on how quickly productivity can be improved.</p>

<p>For instance, in <a href="http://www.econlib.org/library/Ricardo/ricP.html" rel="noreferrer">David Ricardo's original example</a>, comparative advantage recommended that Portugal should produce wine while England produced cloth.  Maybe that's okay as a static analysis, but over time the productivity of wine production improved slowly whereas for England,</p>

<blockquote>
  <p><a href="https://en.wikipedia.org/wiki/David_Ricardo#cite_ref-20" rel="noreferrer">exports of cotton cloth led to accumulation, mechanisation and the whole spiralling growth of the industrial revolution.</a></p>
</blockquote>

<p>The idea that a country should temporarily distort free trade in order to establish industries in which it wants to develop a comparative advantage is often known as "dynamic comparative advantage".  The East Asian economies are frequently referred to as a good example of countries using these ideas successfully.  South Korea didn't start out with a comparative advantage in steel, for instance -- it created one through extensive state intervention.</p>

CC BY-SA 3.0
2018-03-17T14:34:42.993Z
2018-03-17T14:34:42.993Z
Dan
<p>To complement the answers from Dan and Waitakere, protecionism is often justified by strategic interest. Regardless of the gains of comparative advantage, a country or region might want to retain certain industries. Usual explanations are to <strong>avoid external dependence</strong> or to <strong>retain jobs</strong>. </p>

<p>This kind of thinking is one of the justifications for the high levels of protection that the EU has on its agricultural industry: the losses in jobs and the risk with external dependence wouldn't be offset by the gains of lower food costs. <a href="http://ageconsearch.umn.edu/bitstream/230031/2/2016SAEA_AgEconSearch_manuscript_AgriculturalTrade_SanAntonio_January22_2016.pdf" rel="nofollow noreferrer">This paper</a> talks about it, if you want to read more.</p>

CC BY-SA 3.0
2018-03-21T02:53:21.060Z
2018-03-21T02:53:21.060Z
JoaoBotelho
<p>The principle of comparative advantage says that, in a free market, any agent should produce more of the goods for which they have a comparative advantage. The model is usually applied to advocate for the benefits of international trade. This <a href="https://economics.stackexchange.com/a/20998/16561">answer</a> to another question has a great explanation of the theory. In the same answer, some commenters criticized the application of the principle to international trade as misleading.</p>

<p>I got curious about that critiques, so decided to ask a new question: what are some critiques of that model?</p>

CC BY-SA 3.0
2018-03-17T15:15:20.033Z
[This question](https://economics.stackexchange.com/questions/20431/does-trade-lead-to-economic-growth-in-the-most-basic-models-of-trade) is relevant.
Adam Bailey
<international-trade>
What are some critiques to the principle of comparative advantage?
psn
# What are some critiques to the principle of comparative advantage?

(Asked by: username_0 on 2018-03-17)

The principle of comparative advantage says that, in a free market, any agent should produce more of the goods for which they have a comparative advantage. The model is usually applied to advocate for the benefits of international trade. This [answer](https://economics.stackexchange.com/a/20998/16561) to another question has a great explanation of the theory. In the same answer, some commenters criticized the application of the principle to international trade as misleading.

I got curious about that critiques, so decided to ask a new question: what are some critiques of that model?

**Tags:** international-trade
> **Comments:**
> **username_1**: [This question](https://economics.stackexchange.com/questions/20431/does-trade-lead-to-economic-growth-in-the-most-basic-models-of-trade) is relevant.  

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## 2 answers

### Answer by username_2 on 2018-03-17. Score: 7

One of the most common critiques is that the standard model is a static analysis. While a country might be better off today by focusing on its comparative advantage, its longer term prospects depend on the future of that industry, particularly on how quickly productivity can be improved.

For instance, in [David Ricardo's original example](http://www.econlib.org/library/Ricardo/ricP.html), comparative advantage recommended that Portugal should produce wine while England produced cloth. Maybe that's okay as a static analysis, but over time the productivity of wine production improved slowly whereas for England,

> [exports of cotton cloth led to accumulation, mechanisation and the whole spiralling growth of the industrial revolution.](https://en.wikipedia.org/wiki/David_Ricardo#cite_ref-20)

The idea that a country should temporarily distort free trade in order to establish industries in which it wants to develop a comparative advantage is often known as "dynamic comparative advantage". The East Asian economies are frequently referred to as a good example of countries using these ideas successfully. South Korea didn't start out with a comparative advantage in steel, for instance -- it created one through extensive state intervention.


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### Answer by username_3 on 2018-03-21. Score: 2

To complement the answers from Dan and Waitakere, protecionism is often justified by strategic interest. Regardless of the gains of comparative advantage, a country or region might want to retain certain industries. Usual explanations are to **avoid external dependence** or to **retain jobs**.

This kind of thinking is one of the justifications for the high levels of protection that the EU has on its agricultural industry: the losses in jobs and the risk with external dependence wouldn't be offset by the gains of lower food costs. [This paper](http://ageconsearch.umn.edu/bitstream/230031/2/2016SAEA_AgEconSearch_manuscript_AgriculturalTrade_SanAntonio_January22_2016.pdf) talks about it, if you want to read more.


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