David Ricardo Essay ⋆ Political Science Essay Examples ⋆ EssayEmpire

David Ricardo (1772–1823) was an influential British political economist. Born in London to wealthy Jewish immigrants from Holland, his formal schooling ended early in his teenage years. Ricardo began working in his father’s stockbroking firm at age fourteen, which enabled him to start his own business career. In his late twenties, he read Scottish political economist Adam Smith’s The Wealth of Nations (1776), which precipitated his interest in studying economic principles. He married a Quaker girl, Priscilla Ann Willkinson, at age twenty-one and became a Unitarian. As Sephardic Jews, his family had sincere religious commitments and disowned their son as a result of the marriage outside the faith. Ricardo pursued an independent career as a stockbroker, making a fortune for himself in the stock market, and prospered in nearly every endeavor in which he engaged himself. He retired at age forty-two with a fortune of approximately £1 million and established himself as a land proprietor.

In 1819 Ricardo was elected to a seat in the English House of Commons, where he served until illness forced his retirement. In Parliament, he advocated free trade among nations and the repeal of the Corn Laws, which limited the import of corn in an effort to protect English landholders. His prediction of the damaging effects of protectionism was ignored by Parliament during his lifetime, but it was regarded eventually by England and numerous other modern nations as a valid one.

Ricardo was one of the first economists to understand the benefit of free trade among nations even if one was more efficient in all production than the other. He famously illustrated that even if Portugal could manufacture cloth and wine more efficiently than England could, it was still beneficial for England to manufacture cloth and Portugal to manufacture wine provided there was unrestricted trade with each other.

Ricardo’s first work, The High Price of Bullion (1810), which was originally published in the Morning Chronicle, was the development of arguments explaining the increase of the price of gold as paper money depreciated. Through participation in this controversy, Ricardo became friends with economist Thomas Robert Malthus. Although Ricardo affirmed Malthus’ principles of population growth, the two disagreed concerning the causes and nature of gluts (oversupply) and recessions. Ricardo affirmed Say’s Law that supply will call forth its own demand, but Malthus argued that gluts resulted from unequal production and consumption by the wealthy, resulting in higher levels of saving. Ricardo also opposed Malthus’ support of the Corn Laws. In his Essay on Profits (1815), Ricardo argued that the Corn Laws increased the income of landowners at the expense of the consumers and workers. Ricardo advocated the principle of comparative advantage, which still governs as a fundamental law of economics. His labor theory of value was articulated in his The Principles of Political Economy and Taxation (1817), which greatly influenced German philosopher Karl Marx. Ricardo’s economic thought advanced the heritage of classical economists.

Bibliography:

Blaug, Mark. Ricardian Economics: A Historical Study. New Haven, Conn.: Yale University Press, 1958.
Heilbroner, Robert L. The Worldly Philosophers: The Lives, Times, and Ideas of the Great Economic Thinkers. Rev. 7th ed. New York: Simon and Schuster, 1999.
Hollander, Jacob H. David Ricardo: A Centenary Estimate. Baltimore: Johns Hopkins Press, 1910.
Malthus, Thomas Robert. An Essay on the Principle of Population. London: J. Johnson, 1798.
Schumpeter, Joseph A. History of Economic Analysis. New York: Oxford University Press, 1954.
Clair, Oswald. A Key to Ricardo. London: Routledge and Kegan Paul, 1957.
Wood, John Cunningham, ed. David Ricardo: Critical Assessments. London: Taylor and Francis, 1991.

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