So far we have been discussing the positive aspect of the comparative cost theory which showed that the theory has a scientific purpose of determining the direction of trade.
The theory also has a welfare aspect, in which it serves as a proof for the advantages of free trade. Comparative cost difference between the nations not only directs them to trade freely with each other, but also ensures them gainful effects from such trade.
The question arises: does this conclusion hold well if the trading nations exhibit different stages of economic development? The classical economists are very optimistic in their reply.
They are of the view that uninterrupted trade between a rich and a poor country on the basis of comparative cost difference will not only make the former better off, but also function as an engine of growth in the latter.
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International trade, by widening the markets and by stimulating the division of labour, accelerates the process of economic development in the underdeveloped countries.
But, the protectionists and growth economists have cast their doubts regarding the growth aspects of free trade in the less developed countries and have, therefore, recommended an alternative engine of growth, (i.e. domestic industrialization) for these economies.
They considered the classical theory of comparative cost inapplicable to the conditions and growth problems of these countries.