David Ricardo: Profiled People in Economics and Banking

ByPrimary Researcher

Executive Summary

  • David Ricardo is best known for his theory on trade, however, he was also very active in analyzing and critiquing banking.

Introduction

Ricardo’s theory of comparative advantage that supposedly underlies trade is taught to all people that take a course in economics. However, Ricardo’s background and financial ties are virtually never discussed to explained to students. This is covered in the following quotation.

“That’s correct, and mainstream economics denies any of this. It began with Ricardo, whose brothers were major bankers at the time, and he himself was the major bank lobbyist in England. Right after Greece won its independence from Turkey, the Ricardo brothers made a rack-renting loan to Greece at far below par (that is, below the face value that Greece committed itself to pay). Greece tried to pay over the next century, but the terms of the loan ended up stripping and keeping it on the edge of bankruptcy well into the 20th century. But Ricardo testified before Parliament that there could be no debt-servicing problem. Any country, he said, could repay the debts automatically, because there is an automatic stabilization mechanism that enables every country to be able to pay. This is the theory that underlines Milton Friedman and the Chicago School of monetarism: the misleading idea that debt cannot be a problem. That’s what’s taught now in international trade and financial textbooks. It’s false pleading. It draws a fictitious “What If” picture of the world. When criticized, the authors of these textbooks, like Paul Samuelson, say that it doesn’t matter whether economic theory is realistic or not. The judgment of whether an economic theory is scientific is simply whether it is internally consistent. So you have these fictitious economists given Nobel Prizes for promoting an inside out, upside down version of how the global economy actually works.” – Micheal Hudson 

Source: Evonomics

https://evonomics.com/how-financial-parasites-and-debt-bondage/