Comparative advantage is the concept in economics that states that two countries will benefit economically if the relative costs of producing two or more goods differs. The concept of comparative advantage was developed by the 19th century British economist David Ricardo, and it is used in support of free trade. A two-country, two-good example is used by Ricardo, as follows:

Here is how it works. If England in the example has 200 hours of work available, then it can produce one unit of cloth and 5/6 unit of wine (100 + 100 = 200; 100 hours of wine production means 100/120 = 5/6 of a unit of wine produced). At the same time, with 200 hours, Portugal can produce one unit of cloth and one unit of wine and have 30 hours to spare (90 + 80 = 170 – 200 = 30).

England and Portugal will want to trade because England can make two units of cloth (with its 200 work units), and Portugal can make two units of wine (80 × 2 = 160) and have 40 partial units of work to spare. The two countries can then trade to share the 40 partial units of work saved in Portugal, perhaps by allowing England some more wine and Portugal some more cloth, over time (the trade is likely to favor Portugal because of the facts of the case). The economic incentives to do this are very strong, as it is a win-win for both countries. There’s more to it than that, but you get the idea.

On the other hand, we observe in practice that countries develop policies to reduce the opportunities for trade. For example, it is reported that, while membership in the European Union (EU) provides important trade advantages within the EU, English voters overwhelming supported in December 16, 2019, the Tory party, which was keen on Brexit, that is, separating from the trade agreements the country had enjoyed with the EU.

Required

How do you explain the apparent inconsistency between the demonstrated economic advantages of trade and the English voters’ choice to deny these benefits by supporting Brexit?

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Hours of Work Necessary to Produce One Unit of Product Producing Country Cloth Wine England 100 120 Portugal 90 80