Mises Wire

Roberts Again Replies to Boudreaux

Roberts Again Replies to Boudreaux

When Boudreaux writes that comparative advantage does not result from different countries having different internal cost ratios or different opportunity costs of producing one good in terms of another, he puts himself at odds with international trade theory. As economists have known for two centuries, the opportunity cost of one good in terms of another depends on the factors of production. If the factors of production can pick up and leave for greener pastures abroad, the internal cost ratios that determine a country’s comparative advantage are gone with the factors of production.

 

All Rights Reserved ©
What is the Mises Institute?

The Mises Institute is a non-profit organization that exists to promote teaching and research in the Austrian School of economics, individual freedom, honest history, and international peace, in the tradition of Ludwig von Mises and Murray N. Rothbard. 

Non-political, non-partisan, and non-PC, we advocate a radical shift in the intellectual climate, away from statism and toward a private property order. We believe that our foundational ideas are of permanent value, and oppose all efforts at compromise, sellout, and amalgamation of these ideas with fashionable political, cultural, and social doctrines inimical to their spirit.

Become a Member
Mises Institute