Against Ricardian Dogma: A Thoughtful Rebuttal to Sam Rainsy on Trade, Sovereignty, and Comparative Advantage

Mr. Sam Rainsy’s recent commentary urging President Donald Trump to remember Ricardo’s Law of Comparative Advantage is eloquent in theory but fatally blind to reality. Though Ricardo’s principle is arithmetically elegant, it is conceptually incomplete, politically naive, and historically inconsistent with the economic development of the United States itself. As someone who has extensively studied the foundational frameworks of American economic policy from Hamilton to Lincoln, I respectfully submit that Mr. Rainsy’s blind faith in Ricardian logic misreads both the nature of trade and the strategic imperatives that guided America to greatness.

Let us begin with the core premise: that America gains from trade even when others produce “faster and cheaper.” This conclusion is derived from Ricardo’s famous model of comparative advantage, where opportunity costs define national specialization. But Ricardo wrote in a world with no multinational corporations, no global capital mobility, no environmental externalities, no systemic wage arbitrage, no financialization, and no asymmetric labor protections. He never lived to see a global economy where trade policy could hollow out domestic industries, degrade labor standards, and create permanent underclasses in deindustrialized regions.

I. Ricardo’s Simplification: An Elegant Model, A Fragile Reality

Ricardo’s theory assumes full employment, frictionless labor mobility within nations, immobile capital across nations, and static technology. None of these assumptions hold in the real world.

Take the Vietnam vs. U.S. example. While mathematically accurate within the model, it abstracts away from how Vietnam achieves such low labor costs: lax environmental regulation, suppressed unions, and centralized industrial policy. In contrast, U.S. firms operating in a democratic labor market with regulatory compliance are at an engineered disadvantage. This is not “comparative advantage” in the classical sense. It is advantage-by-distortion, a condition Ricardo never anticipated and one which moral political economy cannot endorse.

In The Eternal Struggle: Political Economy and the Specter of Neoclassical Hegemony in the Modern World (2023), I contend that the dominance of neoclassical assumptions has systematically delegitimized the role of statecraft in defending public welfare. When economists valorize efficiency at the expense of sovereignty and social cohesion, policy is reduced to sterile equations divorced from justice.

II. The American System: Why Ricardo Was Rejected by America’s Founders

In Hamilton Based the Central Banking of the U.S. Bank…, I traced how Hamilton, and later Henry Clay and Abraham Lincoln, wholly rejected Ricardian free trade in favor of an interventionist industrial strategy. Their system, later known as the “American System,” was built on three pillars:

1. Protective tariffs to nurture domestic industry;
2. National banking to coordinate capital;
3. Internal improvements funded by the federal government.

This vision saw the infant American economy as vulnerable to the predatory pricing of mature British manufacturers. As I noted, the trade deficit with Britain from 1761 to 1770 had exploded to £739,000—a structural asymmetry that birthed the American Revolution. The colonists’ demand for economic sovereignty was as vital as their quest for political independence. Hamilton’s national bank and protective tariffs were the institutional responses to that imbalance.

Ricardo’s framework, had it been applied, would have consigned America to permanent agrarianism. Instead, it was tariff-protected textile mills in New England, subsidized railroads in the Midwest, and federally financed infrastructure that laid the foundation for America’s transformation into the world’s foremost industrial power.

III. Lincoln’s Moral Economy: Justice Over Efficiency

In Lincoln’s Well-Considered Political Economy, I explore how Lincoln explicitly rejected free trade dogma in favor of moral and democratic industrialism. He viewed protective tariffs as not only economically prudent but ethically imperative. He wrote:

“Give us a protective tariff and we shall have the greatest nation on earth.”

Lincoln’s critique of free trade was not born of nationalism but of empathy. He saw that unregulated trade with low-wage Britain undercut American labor. A Ricardian trade policy would have favored the landed gentry and importers while impoverishing the working class. Tariffs, to Lincoln, were the tax paid by the wealthy to fund civilization and justice.

In this regard, President Trump’s instincts—though not as eloquently articulated—echo Lincolnian logic. The aim is not autarky but equity: to rebalance the asymmetries of global trade so that American workers are not sacrificed at the altar of aggregate efficiency.

IV. Tariffs as Strategic Tools, Not Blunt Weapons

Mr. Rainsy conflates all tariffs with economic self-harm, but this is historically illiterate. From 1816 through 1945, the U.S. maintained high average tariffs and achieved not only rapid industrialization but rising real wages. In The Case for Tariffs: A Shield for Workers and Industries (2023), I demonstrate that:

• Tariffs allowed strategic sectors (e.g., steel, textiles, chemicals) to mature;
• They facilitated labor stability by providing employment certainty;
• They generated revenue for state-building in an era before income tax.

Critically, tariffs are not meant to insulate inefficiency. They are meant to incubate national capabilities. South Korea, Japan, and China all used some form of protection in their rise. The real question is not whether tariffs are inherently bad but whether they are deployed strategically and temporarily to promote national interest.

V. Trade Deficits: Not Numbers, But Signals

Mr. Rainsy also downplays trade deficits as irrelevant abstractions. But deficits matter not merely because of numerical imbalance but because they reflect structural dependency. As Hamilton observed, a trade imbalance becomes dangerous when it:

• Erodes industrial capacity;
• Creates geopolitical vulnerability (e.g., semiconductors);
• Drives wage divergence and regional inequality.

Trump’s critique of the trade deficit, while often couched in transactional terms, reflects a deeper truth: when a nation imports more than it exports over long durations, it finances the difference by either debt or asset sales. This is not sustainable. No household, no business, and no country can permanently live beyond its productive means.

VI. Comparative Advantage in a World of Capital Mobility

Ricardo assumed that capital was immobile across borders. Today, capital flies at the speed of light. If comparative advantage is supposed to reflect the best internal allocation of resources, how can it survive in a world where capital simply relocates to wherever wages are lowest and taxes weakest?

This leads to a grotesque inversion of Ricardo’s logic: instead of nations specializing according to their endowments, nations are remade to conform to the demands of footloose capital. Labor protections are dismantled, unions broken, tax bases eroded, and environmental regulations sidelined.

VII. Political Economy Over Neoclassical Fantasy

We must remember: Ricardo was not a political economist in the modern sense. He did not concern himself with the social institutions necessary for market function—just with the logic of prices. But as I argue in The Eternal Struggle, economics without political economy is a dangerous half-truth. A full understanding of trade must incorporate:

• Labor power and voice;
• Regulatory standards and enforcement;
• Capital concentration and monopoly;
• National security and technological sovereignty.

Trade is not just about comparative advantage. It is about comparative governance. Nations differ not just in cost but in conscience.

VIII. A Final Word: Toward a Just Trade Doctrine

Mr. Rainsy concludes that America must remember the ideas it helped globalize. I agree. But those ideas are not Ricardo’s. They are Hamilton’s, Lincoln’s, and Roosevelt’s. They are the doctrines of a nation that saw trade not as an end but as a means—a means to build a sovereign, inclusive, and resilient economy.

The world does not need a United States that blindly trusts abstract models. It needs a United States that remembers that economic independence is the foundation of political independence, that justice is not the byproduct of efficiency, and that trade must serve people, not theory.

[Photo by DALL·E]

Respectfully,
Dr. Emir Phillips