What is Comparative Advantage?

Had a good exchange in the comments section (and on Twitter) yesterday about David Ricardo’s Law of Comparative Advantage. My point in writing “Eat. Pray. Lovin’ It.” was to illustrate that people have always liked to pick up quickly prepared food. Workers willingly trade their money to save the expense (time and money and hassle) of food preparation. We trade what we are best at, and the act of trading in turn saves both time.

Matt Ridley‘s simple explanation is what I understand Comparative Advantage to be:

WTO Poised for Biggest Success in Years


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