Economics Dictionary of ArgumentsHome
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| Ricardian economics: Ricardian economics is characterized by the theory of comparative advantage, emphasizing the benefits of trade based on differences in opportunity costs. It also includes the law of diminishing returns and the impact of land and labor on production. Ricardo's work laid the foundation for classical economic theory._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments. | |||
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Joseph A. Schumpeter on Ricardian Economics - Dictionary of Arguments
Rothbard II 81 Ricardian theory/Schumpeter/Rothbard: Schumpeter's blistering critique of the Ricardian system is highly perceptive and perfectly apt: „... he [Ricardo] cut that general system [of economic interdependence in the market] to pieces, bundled up as large parts of it as possible in cold storage – so that as many things as possible should be frozen and ‘given’. He then piled one simplifying assumption upon another until, having really settled everything by these assumptions, he was left with only a few aggregative variables between which, given these assumptions, he set up simple one-way relations so that, in the end, the desired results emerged almost as tautologies. For example, a famous Ricardian theory is that profits ‘depend upon’ the price of wheat. And upon his implicit assumptions, and in the particular sense in which the terms of the proposition are to be understood, that is not only true, but undeniably, in fact trivially, so. Profits could not possibly depend upon anything else, since everything else is ‘given’, that is, frozen. It is an excellent theory that can never be refuted and lacks nothing save sense.“(1) >James Mill, >Economy/Ricardo, >Ricardo/Neoclassical economics. 1. J.A. Schumpeter, History of Economic Analysis (New York: Oxford University Press, 1954), pp. 472–3. Compare Walter Bagehot on Ricardo: ‘He dealt with abstractions without knowing they were such: he thoroughly believed that he was dealing with real things. He thought that he was considering actual human nature in its actual circumstances, when he was really considering a fictitious nature in fictitious circumstances. And James Mill, his instructor on general subjects, had on this point as little true knowledge as he had himself.’ Quoted in T.W. Hutchison, ‘James Mill and Ricardian Economics: a Methodological Revolution?’ in Hutchison, On Revolutions and Progress in Economic Knowledge (Cambridge: Cambridge University Press, 1978), p. 57; also see ibid., pp. 26-57. 2. Schumpeter, op.cit. pp. 557-8._____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition. |
EconSchum I Joseph A. Schumpeter The Theory of Economic Development An Inquiry into Profits, Capital, Credit, Interest, and the Business Cycle, Cambridge/MA 1934 German Edition: Theorie der wirtschaftlichen Entwicklung Leipzig 1912 Rothbard II Murray N. Rothbard Classical Economics. An Austrian Perspective on the History of Economic Thought. Cheltenham, UK: Edward Elgar Publishing. Cheltenham 1995 Rothbard III Murray N. Rothbard Man, Economy and State with Power and Market. Study Edition Auburn, Alabama 1962, 1970, 2009 Rothbard IV Murray N. Rothbard The Essential von Mises Auburn, Alabama 1988 Rothbard V Murray N. Rothbard Power and Market: Government and the Economy Kansas City 1977 |
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