Economists love to talk about the theory of comparative advantage, which holds (somewhat counter intuitively) that two countries trading with each other will be better off if each specializes in what it does best, even if one country has an absolute competitive advantage in the production of all goods and services traded.

David Ricardo famously argued that it made sense for England to specialize in the production of cloth and Portugal that of wine, even though Portugal could produce both goods more cheaply.

Unfortunately, the theory has limited application to the real world, and can have pernicious policy consequences.

OTTAWA—During this key election year and on the eve of the tabling of the federal budget, the Broadbent Institute is convening the largest annual progressive politics event for leading thinkers, policy experts and organizers.

Garry Marr / Financial Post

The two men who might be considered the fathers of tax-free savings accounts in Canada, now worth more than $132 billion, appear to be in disagreement over what happens next to their brainchild.

Rhys Kesselman / iPolitics

The federal government has delivered on the first of its two major tax promises from the 2011 election campaign. Income-splitting has been extensively assessed and widely criticized for its revenue cost, its tilt toward higher-income families, and its failure to accomplish anything beneficial for the economy.