At Harvard University in the late 1930s, the mathematician Stanislaw Ulam used to tease the economist and future Nobel Prize winner Paul Samuelson, “Name me one proposition in all of the social sciences which is both true and non-trivial.” It took Samuelson years but, eventually, an answer occurred to him: the Ricardian theory of comparative advantage. Even if Portugal produces both cloth and wine more efficiently than England, as David Ricardo had demonstrated in 1817, the countries can still benefit from trading Portuguese wine for English cloth.
Generalized, this principle forms the basis of the economist’s case for free trade. “The theory of comparative advantage is a closely reasoned doctrine which, when properly stated, is unassailable,” Samuelson would write in his industry-leading textbook, Economics, which debuted in 1948.
