chapter  3
International Production, Trade and Finance
WithDouglas Dowd
Pages 14

The “taxation” of David Ricardo’s magnum opus was that of the “Corn Laws”—tariffs (taxes) on imported grain. Ricardo’s theory yielded a principle that at first sight seems to make a lot of sense: Each nation should specialize in the production of that in which it is comparatively most efficient. Like Smith, Ricardo was concerned in his theory with production and trade, not with finance. Concurrent with the rise of the mammoth transnational corporations was the rebirth in the academy and politics of the free marketry as ideology, in both Smithian and Ricardian terms: Minimize government at home; do away with barriers to trade in the world. However, what constitutes a sufficient rate of economic growth and/or volume of foreign trade stands in direct proportion to some combination of the inequality of income distribution and the resource inadequacies of each nation.