Question

Was comparative advantage created before the absolute advantage?

Answer 1

No , absolute advantage came first , then law of comparitive advantage came into existence . In other words , due to failure of absolute advantage , there was a invesntion of comparirive advantage which give clear cut results .

The concept of absolute advantage is generally attributed to Adam Smith for his 1776 publication The Wealth of Nations in which he countered mercantilist ideas. Smith argued that it was impossible for all nations to become rich simultaneously by following mercantilism because the export of one nation is another nation’s import and instead stated that all nations would gain simultaneously if they practiced free trade and specialized in accordance with their absolute advantage.

David Ricardo developed the classical theory of comparative advantage in 1817 to explain why countries engage in international trade even when one country's workers are more efficient at producing every single good than workers in other countries. He demonstrated that if two countries capable of producing two commodities engage in the free market, then each country will increase its overall consumption by exporting the good for which it has a comparative advantage while importing the other good, provided that there exist differences in labor productivity between both countries