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According to Adam Smith, in such a situation trade would not be profitable for England. What Ricardo showed was that if England specialized in one product and Portugal on the other total output of goods could actually rise. If the products were traded between the countries the both nations could end up with a greater amount of both goods than they would if they never traded...
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If the products were traded between the countries the both nations could end up with a greater amount of both goods than they would if they never traded. As is turned out though, specializing in any good would just not be enough to raise the overall output. To get the best effect David Ricardo showed that the good in which a country should specialize in should be the one that that country has a comparative advantage...
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General points of the essay
: ADAM SMITH AND KARL MARK: CONTRASTING VIEWS OF CAPITALISM
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Comperative Advantage
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