By Homa Katouzian (auth.)
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Extra resources for Ideology and Method in Economics
Example text
His theory of international trade, or 'comparative advantage' (initially due to James Mill), is a monumental synthesis of this philosophy with his own economic method. By assuming differences in technology and nothing else he reached the conclusion that free trade would promote the welfare of all societies. The scenario is a textbook favourite: two countries, two products, constant returns, etc. e. 'the natural state') within each country! It is a tribute to the power of both Adam Smith's philo- HISTORICAL PERSPECTIVES 25 sophy and Ricardo's method that this museum piece of theoretical curiosity (and another one with even more remarkable qualities of unrealism) is generally regarded by economists as a satisfactory explanation of international trade.
The fires of German nationalism had been constantly fanned -by romantics and radicals alike -at least since the French Revolution. Parallel to this political ideal ran the economic objective of closing the technological and production gap between Germany, on the one hand, and France and England, on the other. The more distant future promised the possibility of a united and industrialised Germany breaking into the Anglo-French monopoly of overseas imperialism. Some of the origins of the First World War must be sought in these ideas and events.
If I know I exist because I think, then I can also know of the existence of all others because I think. Hence, the cogito not only elevated human reason to a supreme position for the proof of the external world, it also tended to make all knowledge of it subjective and a priori. Othermainly British- philosophers reacted to this Cartesian subjectivism (sometimes called Idealism) by emphasising the primacy of senseexperience and, hence, observation of the external world, in HISTORICAL PERSPECTIVES 19 arriving at a certain knowledge of it.