Ricardian vice

17 October, 2018 at 18:50 | Posted in Economics | 1 Comment

history-of-economic-analysis-schumpeter-first-edition Ricardo’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 desire 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 is seen as a virtue rather than a vice …

1 Comment

  1. Generally speaking, this is the opinion of people who don’t understand what Ricardo actually wrote. I have yet to find a critic of him that is able to find one of these simplifying unrealistic assumptions in the Principles. The usual reply is that Ricardo made these assumptions implicitly, which means that the unrealistic assumption is rather a product of the critic’s imagination.

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