The Ricardian Vice (I)

26 April, 2017 at 09:05 | Posted in Economics | 1 Comment

77645Ricardo’s … interest was in the clear-cut result of direct, practical significance. In order to get this he cut that general system to pieces, bundled up as large parts of it as possible, and put them 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 theses assumptions, he was left with only a few aggregative variables between which, he set up simple one-way relations so that, in the end, the desired results emerged almost as tautologies … It is an excellent theory that can never be refuted and lacks nothing save sense. The habit of applying results of this character to the solution of practical problems we shall call the Ricardian Vice.

Sounds familiar, doesn’t it?

Only difference is that today it’s seen as a virtue rather than a vice …


1 Comment

  1. You are surely aware that Schumpeter saw the same alleged vice in Keynes’ theory, calling him “Ricardo’s peer.”

    “Keynes was Ricardo’s peer in the highest sense of the phrase. But he was Ricardo’s peer also in that his work is a striking example of what we have called above the Ricardian Vice, namely, the habit of piling a heavy load of practical conclusions upon a tenuous groundwork, which was unequal to it yet seemed in its simplicity not only attractive but also convincing.” (p. 1137)

    I will let the Dude respond to Schumpeter’s opinion

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