Biology Doesn't End With Darwin; Economics Doesn't End With Ricardo

[followup to The Difficulty in Countering Economic Creationism...]

More gems from Muirgeo. This time using a tactic I've frequently seen used by Chomsky-ites and other neo-protectionists: Acknowledge the wisdom and truth found in the writings of Adam Smith and David Ricardo, but then immediately deny that any of these insights are applicable in the "real world" in which we live. You will see the connections with biological creationism shortly.

[I]t’s untrue that people who are against our [U.S.] trade policies are against the principles of Ricardian comparative advantage.

Ricardo has 3 requirements for comparative advantage to be successful.

1) No flow of capital across borders
2) Full employment and freedom of labor to move from job to job
3)Trade is equal.

None of these requirements is met by our current trade policies. I would argue that I am more “Ricardian” in principle then those claiming our current policies fit the bill.

Notice how Muirgeo failed to mentioned that Ricardo is not God. Economics does not progress by appealing to the infallible words of long-dead economist Popes. Ricardo is credited with originating (or at least popularizing) the concept of comparative advantage, just a Adam Smith is credited with originating (or at least popularizing) the concept of absolute advantage. But neither men are Saints to which we can appeal biblically.

Economics has come a long way since both Smith and Ricardo, and some of the things they wrote were later expanded upon and shown to be not true or at least more complicated than they believed. Ricardo's concept of comparative advantage is a perfect example of this phenomenon, because it came to replace Smith's older and incomplete view of absolute advantage. Adam Smith was wrong and Ricardo was right.

So too, Ricardo was wrong (or at least incomplete) on some things. It turns out, even when Ricardo’s conditions for comparative advantage are weakened or even entirely eliminated, the principle of comparative advantage remains intact.

It’s as if Muirgeo is arguing against the concept of Darwinian evolution by pointing out mistakes and incompletenesses found in Darwin’s original work. Sure, Darwin was wrong about a few things, but the central insight of his discovery remains as true as ever. So too the insight of comparative advantage. The progress of biology did not end with Charles Darwin; the progress of economics did not end with David Ricardo.

Bad Samaritan by Joon Chang is a good book which dispels some of the myths of our “free trade” policies.

Joon Chang is either a fool or a charlatan, or both. Tyler Cowen completely demolished his critique of free trade in a recent online debate. Joon could not answer Tyler’s very basic objection (found in any introductory International Economics textbook) to the infant industry argument: it is next to impossible for the government to get the infant industry policy right, to decide which industries the country has a comparative advantage in and then protect those industries in order for them to grow, and then have the wisdom and political will to end those subsidy protections after the fact once the protections have received long standing political support. There is a reason why it is next to impossible for the U.S. to get rid of its farm subsidies. Give farmers huge subsidies for nearly a century and it comes as no great surprise when farmers develop powerful lobbies to protect their protectionist interests. Promoting and encouraging that impulse by actively embracing the infant industry argument, as Joon does, is shear foolishness for someone with a PhD in economics. Again, it’s the intellectual equivalent of someone with a PhD in biology failing to understand rudimentary evolutionary theory. Such people exist, and they generally work for the Discovery Institute.

Which reminds of a quote which applies in equal strength to evolutionary biology as it does to economics:

"It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a 'dismal science.' But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance."

– Murray Rothbard

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