ABSTRACT
Breaking away from classical one-factor models of international trade, Gottfried Haberler (1930, especially Section 3) noted the necessity of working henceforth with non-linear production frontiers. He also noted that the relative opportunity costs of producing autarkic equilibrium quantities determine both the direction of free international trade and the manner in which the gains from trade are shared by the trading countries. Thus, in a single article, Haberler freed both descriptive and normative trade theory from more than a century of classical inhibitions. In particular, he transformed the linear Torrens-Ricardo Principle of Comparative Advantage into a more general principle that accommodates non-linear production frontiers.
