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Quotation of the Day…

… is from page 31 of the original edition of Frank Taussig’s 1915 volume, Some Aspects of the Tariff Question:

In international trade, however, the principle [of comparative advantage], if not most important, needs most attention; because it is obscured by the extraordinary persistence of prejudice and of shallow reasoning in this part of economics.

DBx: More than a century later, Taussig’s observation about the general (mis)understanding of comparative advantage remains spot-on.

Failure to understand comparative advantage – and failure to understand comparative-advantage’s relevance for international trade – isn’t confined to non-intellectuals. Among those who routinely fail to understand comparative advantage are politicians, which is hardly surprising, as every politician’s overriding goal is not to seek truth, or even to speak truthfully, but to win the popularity contests called “elections.” Also prominent among those who regularly misunderstand comparative advantage are intellectuals.