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Comparative Advantage and Uncertainty Bearing

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  • Xavier Méra

    (GRANEM - Groupe de Recherche Angevin en Economie et Management - UA - Université d'Angers - AGROCAMPUS OUEST - Institut National de l'Horticulture et du Paysage)

Abstract

The law of association as espoused by David Ricardo and generalized by Ludwig von Mises cannot directly convey what is at stake in exchanges involving specialization in uncertainty bearing. In this article we explain why the entrepreneurial function as conceptualized by Frank Knight and Mises does not fit in, and what other rationale for association is involved whenever specialization in uncertainty bearing takes place. We also explain how this other raison d'être of association is related to the Ricardian/Misesian law of association and how these insights can be combined to produce a more realistic picture of the market process. We show how specialization in uncertainty bearing, though itself escaping the law of comparative advantage, indirectly but decisively allows for an intensification of the Ricardian division of labor.

Suggested Citation

  • Xavier Méra, 2013. "Comparative Advantage and Uncertainty Bearing," Post-Print hal-00840231, HAL.
    • Handle: RePEc:hal:journl:hal-00840231
    Note: View the original document on HAL open archive server: https://hal.science/hal-00840231v2
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    References listed on IDEAS

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    1. Blaug,Mark, 1997. "Economic Theory in Retrospect," Cambridge Books, Cambridge University Press, number 9780521577014, October.
    2. Hoppe, Hans-Hermann, 1997. "On Certainty and Uncertainty, or: How Rational Can Our Expectations Be?," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 10(1), pages 49-78.
    3. Aldrich, John, 2004. "The Discovery of Comparative Advantage," Journal of the History of Economic Thought, Cambridge University Press, vol. 26(3), pages 379-399, September.
    4. Israel M. Kirzner, 1997. "Entrepreneurial Discovery and the Competitive Market Process: An Austrian Approach," Journal of Economic Literature, American Economic Association, vol. 35(1), pages 60-85, March.
    5. Dionne, G. & Harrigton, E.S., 1991. "An Introduction to Insurance Economics," Cahiers de recherche 9101, Universite de Montreal, Departement de sciences economiques.
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    Cited by:

    1. Xavier Méra, 2013. "Credit Default Swaps, Contract Theory, Public Debt, and Fiat Money Regimes: Comment on Polleit and Mariano," Post-Print halshs-00851723, HAL.

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