Who was David Ricardo?
Q: Who was David Ricardo?
A: David Ricardo was a British political economist who is considered one of the main thinkers behind Classical economics, together with Thomas Malthus, Adam Smith and John Stuart Mill.
Q: What is the theory of comparative advantage?
A: The theory of comparative advantage suggests that a nation should concentrate its resources only in industries where it is most internationally competitive and trade with other countries to obtain products not produced nationally.
Q: What did Ricardo promote?
A: Ricardo promoted the idea of extreme industry specialization by nations, to the point of dismantling internationally competitive and otherwise profitable industries. He also assumed the existence of a national industry policy aimed at promoting some industries to the detriment of others.
Q: Who challenged Ricardian model?
A: The Ricardian model has been challenged by Joan Robinson and Piero Sraffa among others.
Q: How does this theory remain relevant today?
A: The theory remains relevant today as it serves as the cornerstone for arguments in favour of international free trade as a means for increasing economic prosperity. It is also used as guidance for economic policy currently promoted by organizations such as OECD and WTO.
Q: What are some implications from this thinking?
A: Some implications from this thinking include increased international trade which leads to globalization, an emphasis on extreme industry specialization by nations, and an assumption that there exists some form Central Economic Planning in order to promote certain industries over others.
