Tag: David Ricardo

Economics

On Free Trade Ideology

According to conventional β€œwisdom” free trade leads to prosperity. Usually the idea is based on a version of David Ricardo’s (1817) theory of β€œcomparative advantage” which is taught in most high-school economics classes. There is, however, a fundamental problem with that theory, as was shown by Frank Graham in 1923, and unfortunately that problem tends to be ignored. In the following, I will briefly summarize Ricardo’s theory and Graham’s correction thereof, and discuss why the latter is ignored and the effects and implications of that neglect. A revised version of this article is part of chapter 15 of A Buddha...