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On Ricardo and Free Trade

January 12, 2004

I find the argument that Ricardo's great principle doesn't hold because money or persons move around more easily than goods strange. Although logistics is important in actual trade, I can't see what logistics has to do with the principle. Moreover, saying that Ricardo's law only is applicable without production factor mobility, amounts to something like locking Joe and George into their rooms as a condition for them to be allowed to trade freely (via a hole in the door). Perhaps factor mobility is not a good thing for states, armed with things like GDP measures, but surely no one equates the State with Society, and certainly not those fine theorists referred to above?

 

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