From the above problematic modern texts deduce that intersystemic trade is economically beneficial to all concerned (and harmful to none) if, and only if, the laborers of each system specialize in the production of that commodity for which the “relative cost,” given in the commodity-exchange ratios of the respective closed systems, is more favorable. In the example detailed below, the laborers of system I should specialize in F because F costs half as much as C in system I, given the original (closed system) commodity-exchange ratio (1 F = 1/2 C); while F costs three-fourths as much as C in system II, given system II’s autarky exchange ratio (1/3 F ? 1/4 C, i.e., 1 F ? 3/4 C). The “comparative advantage” of system I is thus in the production of F. (The “?” sign stands for “equals” or “exchanges for.” Under Ricardo’s labor theory of value “exchanges for” signifies equality of labor content only if the exchange transpires within either closed system; intersystemic exchange in accordance with Comparative Advantage proceeds by the calculation of mutual benefit described below.)
From a disproof of Ricardo\’s comparative advantage.
From a site called \”Real World Economics\”.