Pitchfork Economics with Nick Hanauer How Economists Forgot the Real World and Led Us Astray (with Nat Dyer)
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Sep 23, 2025 Nat Dyer, an author and researcher specializing in global political economy, critiques David Ricardo's theory of comparative advantage, revealing its unrealistic foundations. He argues this elegant theory fueled harmful globalization and exploitation, perpetuating societal stagnation. Dyer discusses the political ramifications of trade policies under leaders like Trump and Biden, and advocates for a more nuanced understanding of economics that prioritizes real-world implications over abstract models.
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Comparative Advantage's Foundational Elegance
- David Ricardo introduced comparative advantage as a mathematical model showing trade can be win-win even if one country is better at everything.
- The model's elegance made it foundational for trade theory despite unrealistic assumptions.
Hidden Assumptions Mask Real-World Power
- Ricardo's model depends on unrealistic assumptions like full employment, zero transport costs, immobile money, and equal power between partners.
- Those assumptions hide real-world factors like power imbalances, colonies, and slavery that shaped historical trade.
Portugal's Trade Relied On Colonial Extraction
- Portugal exported wine and imported vast amounts of English cloth, balancing trade with Brazilian gold mined by enslaved Africans.
- Ricardo's canonical England–Portugal example therefore concealed a history of exploitation and colonial extraction.
