Ricardo’s Difficult Idea

Tuesday, May 12th, 2009

With Paul Krugman, as with all of life, David Henderson says, we need to keep the wheat and discard the chaff — which is why Henderson recommends Krugman’s piece on Ricardo’s Difficult Idea:

The title of this paper is a play on that of an admirable recent book by the philosopher Daniel Dennett, Darwin’s Dangerous Idea: Evolution and the Meanings of Life (1995). Dennett’s book is an examination of the reasons why so many intellectuals remain hostile to the idea of evolution through natural selection — an idea that seems simple and compelling to those who understand it, but about which intelligent people somehow manage to get confused time and time again.

The idea of comparative advantage — with its implication that trade between two nations normally raises the real incomes of both — is, like evolution via natural selection, a concept that seems simple and compelling to those who understand it. Yet anyone who becomes involved in discussions of international trade beyond the narrow circle of academic economists quickly realizes that it must be, in some sense, a very difficult concept indeed. I am not talking here about the problem of communicating the case for free trade to crudely anti-intellectual opponents, people who simply dislike the idea of ideas. The persistence of that sort of opposition, like the persistence of creationism, is a different sort of question, and requires a different sort of discussion. What I am concerned with here are the views of intellectuals, people who do value ideas, but somehow find this particular idea impossible to grasp.

Read the whole thing, especially if you find both economics and evolution compelling — and other people’s confusion baffling.

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