Editing Comparative advantage (section)

===Alternative approaches===
Recently, Y. Shiozawa succeeded in constructing a theory of international value in the tradition of Ricardo's [[cost-of-production theory of value]].<ref>Y. Shiozawa, A new construction of Ricardian trade theory / A many-country, many commodity case with intermediates goods and choice of production techniques, Evolutionary and Institutional Economics Review '''3'''(2): 141–187, 2007.</ref><ref>Y. Shiozawa, A Final Solution of the Ricardo Problem on International Values, Iwanami Shoten, 2014.</ref> This was based on a wide range of assumptions: Many countries; Many commodities; Several production techniques for a product in a country; Input trade ([[International trade#Traded intermediate goods|intermediate goods]] are freely traded); Durable capital goods with constant efficiency during a predetermined lifetime; No transportation cost (extendable to positive cost cases).

In a famous comment, McKenzie pointed that "A moment's consideration will convince one that Lancashire would be unlikely to produce cotton cloth if the cotton had to be grown in England."<ref>L. W. McKenzie Specialization and Efficiency in World Production, Review of Economic Studies 21(3): 165–180. Citation from p. 179.</ref> However, McKenzie and later researchers could not produce a general theory which includes traded input goods because of the mathematical difficulty.<ref name=economics>"Appendix A: Previous Literature" in [[Alan Deardorff|A. Deardorff]], [https://fordschool.umich.edu/rsie/workingpapers/Papers501-525/r501.pdf ''Ricardian Comparative Advantage with Intermediate Inputs''], February 2004. Working Paper No. 501. [[University of Michigan]].</ref> As John Chipman points it, McKenzie found that "introduction of trade in intermediate product necessitates a fundamental alteration in classical analysis."<ref>Chipman, John S. (1965). "A Survey of the Theory of International Trade: Part 1, The Classical Theory". ''[[Econometrica]]'' 33 (3): 477–519. Section 1.8, p. 509.</ref> Durable capital goods such as machines and installations are inputs to the productions in the same title as part and ingredients.

In view of the new theory, no physical criterion exists. Deardorff examines 10 versions of definitions in two groups but could not give a general formula for the case with intermediate goods.<ref name=economics/> The competitive patterns are determined by the traders trials to find cheapest products in a world. The search of cheapest product is achieved by world optimal procurement. Thus the new theory explains how the global supply chains are formed.<ref>Y. Shiozawa (2016) The revival of classical theory of values, in Nobuharu Yokokawa et als. (Eds.) The Rejuvenation of Political Economy, May 2016, Oxon and New York: Routledge. Chapter 8, pp. 151–172.</ref><ref>Y. Shiozawa, The New Interpretation of Ricardo's Four Magic Numbers and the New Theory of International Values / A Comment on Faccarello's "Comparative advantage"). A paper read on a conference on March 23, 2016.</ref>