Nat Dyer, a writer and researcher in global political economy and a fellow of the Schumacher Institute, explores the evolution of economic thought. He delves into David Ricardo’s pivotal role in shaping economic theories that often detach from reality, emphasizing the influence of power and empire. Dyer critiques mainstream economic models, linking them to modern issues like trade dynamics and environmental crises. By challenging traditional views, he advocates for a more grounded approach to economics that addresses inequality and climate change.
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Ricardo's Trade Model Versus Reality
Ricardo's model used England and Portugal trading cloth and wine to demonstrate win-win trade.
In reality, Portugal suffered a trade deficit, compensated by gold from Brazil mined by enslaved Africans, exposing the model's limitations.
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Globalization's Naive Promise
The 1990s' belief in globalization as a universal win-win was naive.
Free trade often neglected social costs and led to corporate profits at the expense of workers and environment.
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Ricardo and Malthus: Friends and Foes
Ricardo and Malthus were good friends who debated economic ideas deeply.
Malthus challenged Ricardo's theories, arguing helping the poor actually harmed them, influencing harsh 19th-century British poor laws.
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Nat Dyer's "Ricardo's Dream" explores the life and theories of David Ricardo, a key figure in the development of economics. The book delves into Ricardo's contributions, particularly his theory of comparative advantage, and its impact on globalization. Dyer challenges the traditional narrative surrounding Ricardo's work, highlighting the often-overlooked historical context of power, empire, and slavery. The book critically examines the assumptions underlying mainstream economic thought and its consequences for the real world. Ultimately, "Ricardo's Dream" offers a fresh perspective on the history of economic ideas and their implications for contemporary issues.
From the workings of financial markets to our response to the ecological crisis, economic theory shapes the world. But where do these ideas come from?
Ricardo’s Dream: How Economists Forgot the Real World and Led Us Astray (Bristol University Press, 2024) tells the fascinating story of David Ricardo, Adam Smith’s only real rival as the ‘founder of economics’. The wealthiest stock trader of his day, Ricardo introduced the study of abstract models to economics. He also developed the theory of trade that underpinned globalization and hides, behind its mathematical facade, a history of power, empire, and slavery.
Brimming with fresh ideas and stories, Ricardo’s Dream shows how too many economists, from Ricardo’s day to our own, have turned away from observing the real world and led us astray.
Nat Dyer is a writer and researcher specialising in global political economy. He is a Fellow of the Schumacher Institute and the Royal Society of Arts. He has worked for Global Witness and for Promoting Economic Pluralism and his stories have been reported on by the BBC, the New York Times and Bloomberg
Morteza Hajizadeh is a Ph.D. graduate in English from the University of Auckland in New Zealand. His research interests are Cultural Studies; Critical Theory; Environmental History; Medieval (Intellectual) History; Gothic Studies; 18th and 19th Century British Literature. YouTube channel. Twitter.
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