Editing Comparative advantage (section)

===Criticism===
Several arguments have been advanced against using comparative advantage as a justification for advocating free trade, and they have gained an audience among economists. [[James Brander]] and [[Barbara J. Spencer]] demonstrated how, in a strategic setting where a few firms compete for the world market, export subsidies and import restrictions can keep foreign firms from competing with national firms, increasing welfare in the country implementing these so-called strategic trade policies.<ref>{{cite news |last=Krugman |first=Paul R.|author-link=Paul Krugman|title=Is Free Trade Passe? |journal=[[Journal of Economic Perspectives]] |year=1987 |volume=1 |issue=2 |pages=131–144}}</ref>

There are some economists who dispute the claims of the benefit of comparative advantage. [[James K. Galbraith]] has stated that "free trade has attained the status of a god" and that "{{nbsp}}... none of the world's most successful trading regions, including Japan, Korea, Taiwan, and now mainland China, reached their current status by adopting [[neoliberal]] trading rules." He argues that comparative advantage relies on the assumption of [[constant returns]], which he states is not generally the case.{{sfn|Galbraith|2008|pp=68–69}} According to Galbraith, nations trapped into specializing in agriculture are condemned to perpetual poverty, as agriculture is dependent on land, a finite non-increasing natural resource.{{sfn|Galbraith|2008|page=[https://archive.org/details/predatorstatehow00galb/page/70 70]}}

==== 21st century ====
In the 21st century, Ricardo's comparative advantage theory has faced new challenges due to the development of [[global value chain]]s. Unlike Ricardo's model of trade between anonymous parties with equal bargaining power, modern global value chains operate between connected firms with unequal power, with nations specializing in particular production stages rather than complete goods.<ref>{{Cite web |last=Selwyn |first=Benjamin |last2=Leyden |first2=Dara |date=22 April 2021|title=Understanding Development in a Global Value Chain World: Comparative Advantage or Monopoly Capital Theory |url=https://developingeconomics.org/2021/04/22/understanding-development-in-a-global-value-chain-world-comparative-advantage-or-monopoly-capital-theory/|access-date=13 April 2025|website=Developing Economics}}</ref>

The COVID-19 pandemic further challenged the theory when disruptions to globally distributed supply chains prompted nations to reconsider their reliance on foreign production, particularly for critical goods like medical equipment and pharmaceuticals.<ref>[[Joseph Stiglitz|Stiglitz, Joseph]]. (October 2020) [https://business.columbia.edu/sites/default/files-efs/imce-uploads/Joseph_Stiglitz/feps%20covid%20paper%2010%20stiglitz.pdf "Recovering from the Pandemic: An Appraisal of Lessons Learned"]. FEPS COVID Response Papers No. 10, [[Foundation for European Progressive Studies]]. Retrieved April 11, 2025.</ref> In response, some countries have begun reinforcing supplier relationships or diversifying trade networks to mitigate future disruptions.<ref>Baschuk, Bryce. (12 January 2023). [https://www.bloomberg.com/news/newsletters/2023-01-12/supply-chain-latest-trade-self-sufficiency-is-hard-mckinsey-says "McKinsey explores hurdles nations face to reach trade self-reliance"]. [[Bloomberg News]]. Retrieved April 11, 2025.</ref>