Gottfried Haberler's 1930 Reformulation of Comparative Advantage in Retrospect

Abstract

In 1930 Gottfried Haberler freed the doctrine of comparative advantage from its association with David Ricardo's labor theory of value and provided us with its modern opportunity-cost formulation. Haberler's reformulation of comparative advantage revolutionized the theory of international trade and laid the conceptual foundation of modern trade theory. On the occasion of its 75th anniversary, a symposium has been organized to reflect on and celebrate one of the most durable and fruitful ideas in the history of economic thought. In this introductory paper I revisit Haberler's original formulation, which was published in German in the Weltwirtschaftliches Archiv.