The great progressive Harvard economist and prolific best-selling author, John Kenneth Galbraith, wrote that “Ideas may be superior to vested interest. They are also very often the children of vested interest.” I wished he had written that assertion before I took Economic 101 at Princeton. One of the vested ideas taught as dogma then was the comparative advantage theory developed by the early 19th-century British economist, David Ricardo. He gave the example of trading Portuguese wine for British textiles with both countries coming out winners due to their superior efficiencies in producing their native products.
Ricardo’s theory drove policy and political power for two centuries fortifying the corporate and conservative proponents of alleged “free markets” (See: Destroying the Myths of Market Fundamentalism) and “free trade.” The theory’s endurance was remarkably resistant to contrary obvious empirical evidence. Whether Ricardo envisioned it or not, “free trade” became an instrument of colonialism, entrenching poor nations in the extraction and exportation of natural resources while becoming almost totally dependent on western nations’ value-added manufactured products. “Iron ore for iron weapons,” as one observer summed it up. Tragically, too often, the weapons came with the invaders/oppressors.
Fast forward to today’s supply chain crisis disrupting the flow of commerce. Why does the world’s largest economy and technology leader have a supply chain problem
— source nader.org | Ralph Nader | Jun 24, 2022