Final answer:
The Theory of Comparative Advantage, which posits that countries should focus on producing goods where they have a lower opportunity cost, was first mentioned by Robert Torrens but was popularized by David Ricardo in his 1817 treatise 'On the Principles of Political Economy and Taxation'.
Step-by-step explanation:
The Theory of Comparative Advantage was first coined by Robert Torrens, but popularized by David Ricardo. David Ricardo, a renowned economist and politician, elucidated this theory in his 1817 treatise, On the Principles of Political Economy and Taxation. He suggested that by focusing on their respective comparative strengths, countries engage in trade that benefits all participating partners due to specialization and free trade, regardless of absolute efficiencies.
To understand Ricardo's theory, it is essential to distinguish between absolute and comparative advantage. Absolute advantage refers to the ability of a country to produce a good more efficiently than another, while comparative advantage means producing goods at a lower opportunity cost. It's this principle that underpins international trade and explains why nations trade with each other despite large differences in productivity and technology.
Adam Smith's work in The Wealth of Nations also aligns with these ideas, emphasizing the enhancement of wealth and efficiency through specialization and advocating for a global market free of trade barriers.