Comparative Advantage and Uncertainty Bearing

Quarterly Journal of Austrian Economics, Spring 2013, 16, 1, 75-94

Mises Institute Working Paper No. 0011/14

22 Pages Posted: 25 May 2014

See all articles by Xavier Méra

Xavier Méra

Université catholique de l'Ouest

Date Written: 2013

Abstract

The law of association as exposed by David Ricardo and generalized by Ludwig von Mises cannot directly grasp 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 envision 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.

Keywords: Comparative advantage, uncertainty bearing, division of labor, entrepreneurship, speculation, risk aversion

JEL Classification: B53, D80, D90, E44, G00, J24, O16, O40

Suggested Citation

Méra, Xavier, Comparative Advantage and Uncertainty Bearing (2013). Quarterly Journal of Austrian Economics, Spring 2013, 16, 1, 75-94, Mises Institute Working Paper No. 0011/14, Available at SSRN: https://ssrn.com/abstract=2441309

Xavier Méra (Contact Author)

Université catholique de l'Ouest ( email )

3 place André Leroy
Angers, 49000
France

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
94
Abstract Views
623
rank
367,935
PlumX Metrics