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The factor proportions model was originally developed by two Swedish economists, Eli Heckscher and his student Bertil Ohlin in the 1920s. Many elaborations of the model were provided by Paul Samuelson after the 1930s and thus sometimes the model is stirred to as the Heckscher-Ohlin-Samuelson (or HOS) model. In the 1950s and 60s some noteworthy extensions to the model were made by Jaroslav Vanek and so occasionally the model is discovered the Heckscher-Ohlin-Vanek model. Here we will simply call all versions of the model either the "Heckscher-Ohlin (or H-O) model" or simply the more than generic "factor-proportions model". The H-O model incorporates a number of graphic characteristics of payoff that are left out of the aboveboard Ricardian model. Recall that in the simple Ricardian model only one factor of takings, labor, is needed to produce goods and services. The productivity of labor is assumed to vary across countries which implies a difference in technol ogy between nations. It was the difference in technology that motivated preferential international trade in the model. The standard H-O model(1) begins by expanding the number of factors of production from one to two. The model assumes that labor and corking are used in the production of two final goods. Here, great refers to the physical machines and equipment that is used in production. Thus, machine tools, conveyers, trucks, forklifts, computers, office buildings, office supplies, and much more, is considered capital. All productive capital must be owned by someone. In a capitalistic economy most of the physical capital is owned by individuals and businesses. In a socialist economy productive capital would be owned by the government. In most economies today, the government owns some of the productive capital but private citizens and businesses own most of the capital. Any person who owns ordinary stock issued by a business has an ownership share in that company and is entit led to dividends or income based on the profitability of the company. As such, that person is a capitalist, i.e., an owner of capital. The H-O model assumes private ownership of capital. office of capital in production will generate income for the owner. We will refer to that income as capital "rents". Thus, whereas the worker earns "wages" for their efforts in production, the capital owner earns rents. The assumption of two productive factors, capital and labor, allows for the introduction of another realistic feature in production that of differing factor-proportions both across and within industries.