Nat Dyer, "Ricardo’s Dream: How Economists Forgot the Real World and Led Us Astray" (Bristol UP, 2024)
May 1, 2025
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Nat Dyer, a writer and researcher specializing in global political economy, delves into the legacy of David Ricardo, a key figure in economic theory. He highlights how Ricardo's abstract models have obscured real-world issues like power and inequality. The conversation critiques the simplistic assumptions of modern economic theories and discusses the socio-economic consequences of globalization and colonialism. Dyer also emphasizes the limitations of historical economic models in addressing pressing challenges, including climate change and societal well-being.
David Ricardo's introduction of abstract economic models profoundly influenced economic thought, underpinning globalization while revealing hidden histories of power and exploitation.
The podcast critiques traditional economic models for their unrealistic assumptions, emphasizing the need for approaches that address inequality and historical context.
A call for integrating ecological realities into economics is made, highlighting the urgent need for transformative policies to effectively combat climate change.
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David Ricardo's Legacy
The podcast delves into David Ricardo's pivotal role in economics, marking him as a major figure alongside Adam Smith. Known for introducing abstract economic models, Ricardo also presented groundbreaking trade theories that laid the groundwork for globalization. His work revealed the complexities behind seemingly straightforward economic transactions, such as international trade benefiting all parties involved. Despite his influence, the history of his theories includes undercurrents of power, imperialism, and exploitation, often overlooked in mainstream economic discourse.
Critique of Traditional Economic Models
The discussion reveals a growing skepticism regarding the reliability of traditional economic models founded on unrealistic assumptions. Economists have historically used these models to justify policies, often ignoring the historical and social contexts that influence economic outcomes. Such disconnects have resulted in misguided conclusions about wealth distribution and trade benefits, highlighting the need for a more nuanced understanding of economics. This critique suggests that existing models should be adapted to address contemporary global challenges, including inequality and environmental sustainability.
Climate Change and Economic Implications
The relationship between climate change and economics is explored, illustrating how traditional models often exclude environmental factors. Notable economist William Nordhaus attempted to calculate the economic impact of climate change, but his conservative estimates downplayed the urgent need for action. This has significant ramifications, as his projections could lead to complacency in addressing climate issues. The podcast emphasizes the necessity for an economic framework that genuinely incorporates ecological realities, advocating for transformative policies to combat climate challenges.
Emerging Voices in Economics
Despite the prevailing dominance of traditional economic models, new thinkers are advocating for a re-evaluation of how economics interacts with society. Influential figures like Thomas Piketty and Joseph Stiglitz are challenging existing paradigms by exposing issues of inequality and advocating for a sustainable economic model. This shift reflects a broader recognition of the limitations within conventional economics, calling for a more holistic approach that considers human and environmental factors. As the dialogue evolves, it shows promise for a future where economic practices align more closely with social equity and ecological stewardship.
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.
