Ricardo, David

(1772–1823)

   A prominent and methodologically innovative political economist. Of a Jewish family and trained as a stockbroker, he broke with Judaism and his family, while becoming a successful broker and early amassing a fortune. Drawn to political economy by reading Adam Smith, and a friend of James Mill and Thomas Malthus, he wrote extensively on the inflation of paper money subsequent to the wartime suspension of convertibility into bullion. He then took up the newly introduced Corn Laws , arguing that the interests of landlords were opposed to those of every other class. In 1817, Ricardo published his chief work, the Principles of Political Economy and Taxation. He became a member of Parliament in 1819, spoke for the reduction of tariffs, the paying down of the national debt, and the moderate reform of parliament; he was highly respected in the House of Commons for his knowledge of economic questions.

   While he evinced great respect for Smith, Ricardo disagreed with him on a number of points, most of all his theory of value. Ricardo’s Principles were notable above all for their use of mathematical techniques in the attempt to deduce from original premises the rate of profit; in this it is accurate to see Karl Marx as a Ricardian. Ricardo claimed to show that the rate of profit tended to fall with a necessity he compared to gravitation, but for the significant caveat that technical progress could overcome this downward force. The immediate political consequences of Ricardo’s doctrines were to demonstrate that agricultural rents - which is to say, aristocratic incomes - increased with the price of food: “a rent is paid because corn is high.” The idea that high food prices went straight into aristocratic rents was a powerful force behind the abolition of the Corn Laws and the establishment of free trade. Although Ricardo’s closely argued study of the question was not as widely read or cited as the work of Smith, it provided intellectual ammunition to the advocates of free trade. Like Smith, Ricardo was opposed to exclusive colonial systems. Also like Smith, his primary impact on imperial policy was indirect, through the establishment of classical political economy, with its free trade implications, as the hegemonic authority on its subject.

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   FURTHER READING:

    Peach, Terry. Interpreting Ricardo. Cambridge: Cambridge University Press, 1993;

    Sraffa, Piero, and M. H. Dobb. The Works and Correspondence of David Ricardo. 11 vols. Cambridge: Cambridge University Press, 1973.

   MARK F. PROUDMAN