When trade became more widespread and countries started mass-producing goods, it became important to figure out which goods to produce for export in exchange for what. Each country obviously has the potential to create all the products it needs, but we'd rather trade for profits. Comparative advantage comes in here and as the name suggests, it is a theory that posits that it would be more profitable to produce more or less of a good based on its cost of production compared to the cost of importing. 

David Ricardo is one of the influential classical economists and was a Portuguese Jew who married a Quaker woman against his parents' wishes, who disowned him after that. Ricardo made almost all his money off basically betting on the outcome of the Battle of Waterloo (made a million pounds at that time), retired, bought a parliamentary seat, and held a great record as a reformer. 

He also created the classical theory of comparative advantage in international trade. The theory is an iconic one, which is super intuitive and easy to understand once you get the basic premise that even if your country has more efficient producers, sometimes it is more profitable to import things. 

He explained this with a super basic example - take two countries (England and Portugal) and two commodities (cloth and wine). They are not alternatives for each other, and they are not complementary to each other. Portugal is more efficient at producing both. 

Keep in mind that at this point we aren't really talking about quality or taste - we are assuming that both countries produce the exact same product with different rates of productivity. 

Both countries make both cloth and wine - in Portugal, it takes 7 men a year to make a unit of cloth, and 8 men a year to make a unit of wine. In England - it takes 10 men to make cloth and 12 to make wine. Clearly, Portugal does more for less. Here we are assuming that the cost of production is tied up directly to the units of labor. 

Here's where the important concept of opportunity cost comes up. IDK if you remember but here goes - whenever you choose between two options, you don't just pick one and pay for that, you also pay a certain price for the one you didn't pick. Say you only had enough money for one, but you have to choose between chocolate and weed. Chocolate would help satisfy your sweet tooth, but weed would help you relax better. So you score pot and pay for it, but also you're paying for not having chocolate now. Your sacrificing chocolate is worth something. This is obviously not the best example but roughly speaking, the opportunity cost is the price you pay for forgoing the next best alternative for your chosen purchase. 

In England, the comparative cost for producing cloth instead of wine is 10/12=0.83, and in Portugal, the comparative cost is 7/8=0.88. Maybe let England make the cloth since the comparative cost is lower. Meanwhile, although Portugal has a clear advantage in making both goods, it enjoys a greater advantage in the production of wine (12-8/12 maane roughly 33% of the price) compared to cloth (11-7/11 maane 36% of the price in England). So the Portuguese would redirect all their manufacturing resources towards the production of wine, while England would do the same for cloth. Both countries benefit mutually from this deal. 

A super easy and probably inappropriate example is imagine Usain Bolt had an errand to run, like go to the store and buy milk. He's a fast man so he can do it really quick. But at the same time, he has to be somewhere else to do a Puma ad campaign for which he'll make $$$. So it makes so much more sense for him to hire his neighbor to run to the store and buy milk for him. He's slower and charges like a dollar for his effort, but this is so much better for Bolt because he gets his errands run, and his $$$.The neighbor just made the easiest money of his life and got to meet Usain Bolt. Win-win.

Series of letters for my manfriend who has a three-second attention span, during lockdown so he wouldn't leave me or forget me. Edited to take the XXX bits out, if you see an accidental yucky cheese moment pls ignore.