Ayau explained the Law of Compared Costs

Manuel F. Ayau, adressing the students

The students of the Economic Process I class, from the Medicine, Dentistry, Nutrition and Psychology schools of the Francisco Marroquín University, participated in a conference on the importance of the Law of Compared Costs, lectured by Manuel F. Ayau, president emeritus  of this house of studies.

«The Law of Compared Costs is also known as David Ricardo´s Law of Association. At the beginning of the XIX century, David Ricardo discovered the economic phenomenon that got to be known by his name. The same one explains why humans got associated and formed the collective being that we know as «society». It explains why the division of labor happened and, therefore, interchange. How it got intensifyied as the use of the money allowed more and more indirect interchange; how the division of labor increased the efficiency or productivity of each individual and therefore it made the considerable increase of the wealth of the entire world possible», Ayau says, in his work From Robinson Crusoe to Friday, available at the Social Economic Studies Center (
CEES).

The implications of the Law of Association allow us to understand, for example, why it is that where freedom prevails the rich are not rich because the poor men are poor, but all the opposite: the poor men are less poor because the rich ones are richer.

The same one explains that the society arose and renews itself due to a socioeconomic phenomenon, that is, in a free interchange both participants win.

Manuel F. Ayau is president emeritus of this house of studies and is author of books like The Economic Process, How to improve the standard of life, The lost decadeand the mentioned above, From Robinson Crusoe to Friday.

The conference, organized by the Henry Hazlitt Center, was celebrated on Thursday February 9 of 2006 in the Friedrich Hayek Auditorium of this University.

More photos,
here.