Two hundred years ago today, on 11 September 1823, the classical economist David Ricardo died at his grand country estate in the Cotswolds surrounded by his family. He was only 51 years old.
A week earlier, his ear had begun to ache. It was not the first time. He had already partly lost his hearing. But this time, the pain was more acute and Ricardo stayed in bed looked over by his brother, a doctor, and his wife and daughters. A few days later, on 9 September, he “seemed decidedly better”, wrote his friend James Mill. But, it was false hope. The infection spread to the brain and caused, said Mill, “a period of unspeakable agony”. The family realised to their shock that Ricardo was on his death bed. His biographer Piero Sraffa writes “the transition was sudden, from perfect confidence to complete despair.” On Thursday 11 September 1823, around noon, the great classical economist died. Ricardo’s son-in-law told a friend, “I will not attempt to describe to you the feelings of those who witnessed the event—you may conceive and I doubt not will sympathise with them”.
“Ricardo’s Dream is not just about international trade theory. It argues that David Ricardo is much more important than that.”
Ricardo is mostly remembered today as the father of international trade theory. His theory of comparative advantage – which itself turned 200 in 2017 and was feted in The Washington Post among other places – is often talked about with superlatives. It has been described as ‘the deepest truth’, the ‘most counterintuitive idea’, and the ‘crown jewels’ of economics. It was regularly deployed during the heyday of hypergloblisation from the 1990s to defend the orthodox view of international ‘free trade’. Some now celebrate and others mourn the passing of Ricardian verities as policy elites sour on globalisation.
For the past three years, I’ve been researching and writing a book on Ricardo, his place in economics, and his, not always positive, impact on the world.
My interest was sparked one sunny day during the Covid lockdown in 2020, when I read an excellent paper by Matthew Watson, professor of political economy at Warwick University. It contrasts Ricardo’s famous idea with historical reality. The oft-repeated example of comparative advantage is of England and Portugal trading cloth and wine, which makes both countries better off. Watson shows that there is a real, neglected history of English and Portuguese trade in these two products which cannot be untied from British naval power, Brazilian gold, or indeed the trade in enslaved Africans across the Atlantic. If I could tell this story in an engaging way for the general reader, I thought, I might be on to something. This is what I attempted with my book, working title Ricardo’s Dream, which is due to be published in 2024 by Bristol University Press.
“Joseph Schumpeter, called the unhelpful tendency of drawing policy conclusions from highly-abstract models ‘the Ricardian Vice’.”
But, Ricardo’s Dream is not just about international trade theory. It argues that David Ricardo is much more important than that. You’ll have to read the book to understand why, but here’s the super-concentrated version. Ricardo’s influence is large and, today, often unremarked. A surprising number of economists and historians have argued that David Ricardo is Adam Smith’s only true rival to the title of the founder of modern economics.
I make the argument that Ricardo origniated the now-much-used technique of answering difficult questions about the world by creating simple, abstract models. (Ricardo’s models and modern economic models are not the same, but they point in the same direction.) The later great economist, Joseph Schumpeter, called the unhelpful tendency of drawing policy conclusions from highly-abstract models ‘the Ricardian Vice’. Yet, today, some argue, I believe mistakenly, that trusting in abstract models of the economy is not a vice at all but a virtue.
You can also make the case that Ricardo, a former stock trader, was the creator of ‘economic man’: the ubiquitous and controversial figure at the heart of so many models. This ‘rational’, or more accurately calculating, and self-interested person continues to haunt economic thinking to this day, even though everyone knows he is a pure fiction. Too many economists continue in the willing suspension of disbelief (to use Samuel Taylor Coleridge’s phrase) because the orthodoxy since the 1960s – taking the lead from Milton Friedman – has ruled that the reality of assumptions is of no consequence. I trace some of the critics of this approach from within economics, such as the Nobel laureate Herbert Simon, who claimed that this type of economics was built on ‘the principle of unreality’. This explains why the working subtitle of my book is ‘How Economists Forgot the Real World and Led Us Astray’. Not everyone will like this argument and I have only the space to signpost it here. In Ricardo’s Dream I argue the case.
This all matters today, 200 years after Ricardo’s death, because economists and the way they think have for the last fifty years been a powerful force shaping the world. The period from the mid-1960s to the late 2000s has been called ‘The Economists’ Hour’, as popularised in the best-selling book by Binyamin Applebaum. For much of this period, ‘Thinking like an Economist’ (the title of another excellent book from 2022 by Elizabeth Popp Berman) was the language of ‘serious’ government policy and discussion both on the right and left. These two authors, and many others, draw links between the prestige of a certain kind of economics and some of the chronic global problems of destruction of the living world, the widening gap in the west between rich and poor, and the growing might of corporations. I trace a similar story to Applebaum and Berman with a longer, and I hope fresh, historical frame.
The research for Ricardo’s Dream has taken me into the archives of the Bank of England to leaf through the records of Ricardo’s stock trading, along mines hand-dug by enslaved men, women and children in Brazil from where in the 1700s gold flowed into Portugal and then England (and, of course, through a ridiculously heavy pile of books and PDFs). I’ve been helped along the way by far more people than I can name here.
The research has also taken me to Ricardo’s country estate Gatcombe House – now the home of the late Queen Elizabeth’s daughter Princess Anne – where he died two hundred years ago today. In October last year, alongside my editor, I visited Ricardo’s grave on the outskirts of Chippenham in Wiltshire where the classical economist was buried, in a private family funeral, a week after his death on 18 September 1823. The classical-style family tomb still stands at the rear of a handsome Cotswold-stone church.
David Ricardo was a spectacularly successful man: first, financially on the London Stock Exchange and then, intellectually in helping to found modern, abstract economics. His early death at 51 was mourned by family, friends, and public admirers. But, perhaps, the classical economist himself would have met it with more equanimity. A few years before his death, he wrote to his great friend James Mill (the overbearing father of the philosopher John Stuart Mill) “I consider life on the whole as not a very desirable thing to retain after 60” before adding “I have not I assure you seriously quarrelled with life – I am on very good terms with it”. After his death, people have not ceased from quarrelling over his legacy.
I’ve wrestled with Ricardo’s life, thinking, and legacy over the past few years and look forward to sharing the stories and insights I’ve uncovered with you in my book and how they help to explain our present moment.
Please do get in touch if you have any comments or questions. I’m on Twitter/X @natjdyer or you can click on the ‘contact me’ button in the header above.
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