A.Stephen Smulski responds: I agree with those who feel that a basement is no different than an above-grade living space: The vapor retarder should be installed on the warm side of the wood frame wall. Sandwiching the vapor retarder between the insulation and the interior finish ensures that the vapor retarder is always warmer than the dew point. As a consequence, moisture can’t condense on it regardless of whether the water comes from inside the basement or from the soil outside the foundation.
The vapor retarder inside the wood frame wall works in conjunction with dampproofing (a bituminous liquid, for example) applied to the exterior of the foundation to keep the wood frame wall dry. By clogging micropores in the surface of concrete and masonry, dampproofing hinders both vapor diffusion and capillary transport of soil moisture...
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