🎯 England's Golden Age
14.1 / 20.0
your welfare — reach 20 to win
⚓ Best you can do alone
14.1
autarky ceiling — trade must beat it
🤝 Mutual gains
—
Portugal wins too, or no deal
🏴Englandgood at cloth
🇵🇹Portugalgood at wine
🧵 cloth
⛵
🍷 wine
⛵
You · decide your economy
🏴 England
🧵 Cloth made
20
🍷 Wine made
10
Each English worker makes 4 cloth or 2 wine. The rest of your 10 workers go to the vineyards.
Welfare (needs both cloth & wine)14.1
Split evenly, you top out near 14.1 on your own. Can trade do better?
Trade partner · plays its own hand
🇵🇹 Portugal
🧵 Cloth made
0
🍷 Wine made
90
Each Portuguese worker makes 6 cloth or 9 wine — better than you at both. Portugal has read its Ricardo: it pours all 10 workers into wine, its comparative advantage, making 90 wine and no cloth. It will only sign a deal that leaves it better off than farming for itself.
Portugal's welfare—
Alone, Portugal reaches 36.7. Your offer must leave it at least that well off.
⚖️ Strike a deal — send the ship
Terms of trade: — wine per cloth
set a ratio to see if it can work
England won't trade below ½
Portugal won't pay above 1½
What each piece really means (say this in your breakout room)
| England & Portugal | Ricardo's two countries. Portugal has the absolute advantage in both goods — it's simply more productive. The lesson is that this does not mean it should make everything. |
| Looms vs. vineyards | Your opportunity cost. England gives up little wine to make cloth (bad at wine anyway), so cloth is England's comparative advantage. Full specialization in cloth is the counter-intuitive winning move. |
| Welfare meter | You need both goods, so welfare rewards a balanced basket. Making 40 cloth and zero wine is useless — until you trade half of it for wine. |
| "Alone" baseline | Autarky — self-sufficiency. The most England can reach making everything itself is ~14.1. Any welfare above that line is a pure gain from trade. |
| Terms of trade | The price in the deal (wine per cloth). It must sit between the two countries' home costs (½ and 1½). Inside that band, both nations gain; outside it, one side refuses. This is the harmony Ricardo proved. |
| Portugal's refusal | Portugal signs only if the deal beats its own autarky (36.7). So every deal that gets signed makes both countries richer — the gains from trade are real, not taken from anyone. |
| Where the gains go | Push the ratio toward 1½ and you capture most of the gain; toward ½ and Portugal does. The split of the gains is a negotiation — a small echo of Ricardo's bigger theme that distribution is where the conflict lives. |