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… is from page 131 of the 1936 English-language edition (translated from German by Alfred Stonier and Frederic Benham) of Gottfried Haberler [2]’s classic 1933 work, The Theory of International Trade With Its Application to Commercial Policy [3]:
Somebody or other is always trying to show that the Law of Comparative Cost is valid only under the simple assumptions upon which it was originally formulated. But we shall demonstrate that this is not so and that the simplifications merely help the exposition without affecting the essentials of the matter.
DBx: Yes. And Haberler does indeed go on in the pages that follow this quotation to demonstrate beyond any shadow of a doubt the generality and near-universal applicability of the principle of comparative advantage [4]. Indeed, for this principle not to apply to reality requires truly bizarre circumstances.
What was true nearly 90 years ago remains true today. No era is without people who, failing to understand the principle of comparative advantage – or as Haberler here calls it, the Law of Comparative Cost – conclude from their confusions that the principle of comparative advantage applies in reality only under limited and rare circumstances. Pay no attention to these people.