At first blush, real-world trade patterns would seem to challenge the theory of comparative advantage.

ECONOMIST: Trade winds | The

But they do not overturn the fundamental insight of the theory of comparative advantage.

ECONOMIST: Trade winds | The

In essence, the theory of comparative advantage says that it pays countries to trade because they are different.

ECONOMIST: A short tour of economic theory

For starters, the idea that value creation is a one-way street from the top to the bottom is not just offensive, but it ignores the principle of comparative advantage, a key breakthrough in market theory.

FORBES: The Fable Of Market Meritocracy

According to Ricardo's theory, both countries will be better off if each specialises in the industry where it has a comparative advantage, and if the two trade with one another.

ECONOMIST: A short tour of economic theory