I don't see how that's true. Let's run through the standard example from Wikipedia.
1) England can produce a unit of cloth for 100 units of labor, and a unit of wine for 120 units of labor. Portugal can produce a unit of cloth for 90 units of labor, and a unit of wine for 80 units of labor. Portugal has absolute advantage in both goods, but England has a comparative advantage in cloth. By the standard Ricardian argument, we get lots of trade and happiness.
2) Now let's change the situation slightly. Replace all occurrences of "units of labor" with "units of capital", and assume that capital can move freely between countries. We've lost the key component of comparative advantage, the idea that producing a good forces you to "forgo" producing some other good. Everyone just produces everything in Portugal, and England dies. Whoops!
3) Now allow England to set up protectionism, so that all wine consumed in England must be locally produced. This way it can survive. Not very nicely, but between (2) and (3) I'd choose (3) every time.
You are missing that for capital in England to move to Portugal, something has to move the other way.
If you look at actual neoliberal trade, a lot of production of goods (and even services, to the extent that they can be provided remotely) moves to the peripheries, but the core's comparative advantage becomes in renting out surplus capital (which produces even more surplus capital to rent out). That is, the developed world in actual neoliberal trade with free capital movement are the countries that are like England in your example.
> You are missing that for capital in England to move to Portugal, something has to move the other way.
Why? Because nature abhors a vacuum? :-)
As far as I can tell, production doesn't really move to the poorest countries like the one in my example. It seems that it moves to countries that have an absolute (not just comparative) advantage in manufacturing costs.
Well, because "England" and "Portugal", on the level that Ricardian comparative advantage really works, aren't really countries, but sets of people (and, really, the comparative advantage really exists on the individual level, its existence between sets of people is simply an aggregate of its individual existence.)
Absent an external actor using force to compel an involuntary transfer, productive capital moving from person E to person P requires some item(s) of value moving to E such that the value to E justifies surrendering the capital.
1) England can produce a unit of cloth for 100 units of labor, and a unit of wine for 120 units of labor. Portugal can produce a unit of cloth for 90 units of labor, and a unit of wine for 80 units of labor. Portugal has absolute advantage in both goods, but England has a comparative advantage in cloth. By the standard Ricardian argument, we get lots of trade and happiness.
2) Now let's change the situation slightly. Replace all occurrences of "units of labor" with "units of capital", and assume that capital can move freely between countries. We've lost the key component of comparative advantage, the idea that producing a good forces you to "forgo" producing some other good. Everyone just produces everything in Portugal, and England dies. Whoops!
3) Now allow England to set up protectionism, so that all wine consumed in England must be locally produced. This way it can survive. Not very nicely, but between (2) and (3) I'd choose (3) every time.
Am I missing something?