Silences In Ricardo: Comparative Advantage and The Class Distribution Of Free Trade Benefits

Abstract

To succeeding generations of economists, perhaps the best known part, at least by hearsay, of David Ricardo's Principles of Political Economy and Taxation has been Chapter VII, On Foreign Trade. [Sraffa] This chapter contains Ricardo's presentation of the doctrine of comparative advantage as the basis of international specialization under a regime of free trade. It is not generally appreciated, however, that Ricardo's analysis of foreign trade is not very well connected to the central problem dealt with in the Principles. In the preface to the Principles, Ricardo indicates that the primary problem in political economy is to determine the laws that govern the distribution of output between landlords, capitalists and workers. The primacy of distribution is dictated by the consequences that it has for capital accumulation and economic growth. His analysis of foreign trade, on the other hand, is carried out in supra-class terms of national advantage.1 In this respect, Ricardo was actually silent on the issue of how the gains from foreign trade are distributed to the various classes of society and, hence, was prevented from adequately analyzing the effects of foreign trade on capital accumulation and economic growth. It can be argued that Ricardo was simply avoiding redundancy. It is obvious, after all, what he thought the effects of free trade ? particu? larly the elimination of import restrictions on corn, the generic name given to agricultural foodstuffs ? would be on different classes in England, the cosmopolitan center whose interests he was promoting. While this is basically correct, such an argument cannot be applied to the class distribution of free trade benefits in the countries with which England would trade. The purpose of this paper is to fill in the silences by connecting the theory of international trade to the theory of distribution and growth, which is elaborated elsewhere in the Principles. By doing this, we will see that the generality of Ricardo's claim that foreign trade is highly