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{{Short description|British economist and politician (1772–1823)}} | {{Short description|British economist and politician (1772–1823)}} | ||
{{other people}} | {{other people}} | ||
{{Use British English|date=April 2026}} | |||
{{Use dmy dates|date=April 2022}} | {{Use dmy dates|date=April 2022}} | ||
{{Infobox officeholder | {{Infobox officeholder | ||
| | | honorific_prefix = [[The Right Honourable]] | ||
| name | | name = David Ricardo | ||
| image | | image = Portrait of David Ricardo by Thomas Phillips.jpg | ||
| | | caption = Portrait by [[Thomas Phillips]], {{circa}} 1821 | ||
| office = [[Member of Parliament (United Kingdom)|Member of Parliament]] <br />for [[Portarlington (UK Parliament constituency)|Portarlington]] | |||
| office | | term_start = 20 February 1819 | ||
| term_start | | term_end = 11 September 1823 | ||
| term_end | | predecessor = [[Richard Sharp (politician)|Richard Sharp]] | ||
| predecessor | | successor = [[James Farquhar (MP)|James Farquhar]] | ||
| successor | | birth_date = {{Birth date|df=y|1772|4|18}} | ||
| birth_date | | birth_place = London, England | ||
| birth_place | | death_date = {{Death date and age|df=y|1823|9|11|1772|4|18}} | ||
| death_date | | death_place = [[Gatcombe Park]], Gloucestershire, England | ||
| death_place | | party = [[Whigs (British political party)|Whig]] | ||
| children = 8, including [[Osman Ricardo|Osman]] and [[David Ricardo (the younger)|David the Younger]] | |||
| party | | profession = {{hlist|Economist|politician}} | ||
| children | | module = {{Infobox economist|embed=yes | ||
| profession | |||
| module | |||
| school_tradition = [[Classical economics]] | | school_tradition = [[Classical economics]] | ||
| field = | | field = | ||
| influences =[[Jeremy Bentham|Bentham | | influences =[[Jeremy Bentham|Bentham]]{{·}}[[Adam Smith|Smith]] | ||
| contributions = [[Ricardian equivalence]], [[labour theory of value]], [[comparative advantage]], [[Diminishing returns|law of diminishing returns]], [[Ricardian economics]] {{small|''('''later interpretations:''' [[Ricardian socialism]] and [[Neo-Ricardian economics]])''}}, [[Economic rent]]<ref>Miller, Roger LeRoy. ''Economics Today''. Fifteenth Edition. Boston, MA: Pearson Education. p. 559</ref>}} | |||
| contributions = [[Ricardian equivalence]], [[labour theory of value]], [[comparative advantage]], [[Diminishing returns|law of diminishing returns]], [[Ricardian socialism]], [[Economic rent]]<ref>Miller, Roger LeRoy. ''Economics Today''. Fifteenth Edition. Boston, MA: Pearson Education. p. 559</ref>}} | |||
}} | }} | ||
{{Capitalism sidebar}}{{Economics sidebar}}{{Liberalism UK|People}}{{Liberalism sidebar}} | {{Capitalism sidebar}}{{Economics sidebar}}{{Liberalism UK|People}}{{Liberalism sidebar}} | ||
'''David Ricardo''' (18 April 1772 – 11 September 1823) was a British economist and politician. He is recognized as one of the most influential [[Classical economics|classical economists]], alongside figures such as [[Thomas Robert Malthus|Thomas Malthus]], [[Adam Smith]] and [[James Mill]].<ref>Sowell, Thomas (2006). ''On classical economics''. New Haven, CT: [[Yale University Press]].</ref><ref>{{Cite web | url= | '''David Ricardo''' (18 April 1772 – 11 September 1823) was a British economist and politician. He is recognized as one of the most influential [[Classical economics|classical economists]], alongside figures such as [[Thomas Robert Malthus|Thomas Malthus]], [[Adam Smith]] and [[James Mill]].<ref>Sowell, Thomas (2006). ''On classical economics''. New Haven, CT: [[Yale University Press]].</ref><ref>{{Cite web | url=https://www.policonomics.com/david-ricardo/ | title=David Ricardo | Policonomics| date=30 January 2012}}</ref> | ||
Ricardo was born in London as the third surviving child of a successful stockbroker and his wife. He came from a [[Sephardic Jews|Sephardic Jewish]] family of Portuguese origin. At 21, he eloped with a [[Quaker]] and converted to [[Unitarianism]], causing estrangement from his family. He made his fortune financing government borrowing and later retired to an estate in [[Gloucestershire]]. Ricardo served as [[High Sheriff of Gloucestershire]] and bought a seat in Parliament as an earnest reformer. He was friends with prominent figures like [[James Mill]], [[Jeremy Bentham]], and [[Thomas Robert Malthus|Thomas Malthus]], engaging in debates over various topics. Ricardo was also a member of [[The Geological Society]], and his youngest sister was an author. | Ricardo was born in London as the third surviving child of a successful stockbroker and his wife. He came from a [[Sephardic Jews|Sephardic Jewish]] family of Portuguese origin. At 21, he eloped with a [[Quaker]] and converted to [[Unitarianism]], causing estrangement from his family. He made his fortune financing government borrowing and later retired to an estate in [[Gloucestershire]]. Ricardo served as [[High Sheriff of Gloucestershire]] and bought a seat in Parliament as an earnest reformer. He was friends with prominent figures like [[James Mill]], [[Jeremy Bentham]], and [[Thomas Robert Malthus|Thomas Malthus]], engaging in debates over various topics. Ricardo was also a member of [[The Geological Society]], and his youngest sister was an author. | ||
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Ricardian theory of international trade challenges the [[mercantilist]] concept of accumulating gold or silver by promoting industry specialization and free trade. Ricardo introduced the concept of "comparative advantage", suggesting that nations should concentrate resources only in industries where they have the greatest efficiency of production relative to their own alternative uses of resources. He argued that international trade is always beneficial, even if one country is more competitive in every area than its trading counterpart. Ricardo opposed [[protectionism]] for national economies and was concerned about the short-term impact of technological change on labour. | Ricardian theory of international trade challenges the [[mercantilist]] concept of accumulating gold or silver by promoting industry specialization and free trade. Ricardo introduced the concept of "comparative advantage", suggesting that nations should concentrate resources only in industries where they have the greatest efficiency of production relative to their own alternative uses of resources. He argued that international trade is always beneficial, even if one country is more competitive in every area than its trading counterpart. Ricardo opposed [[protectionism]] for national economies and was concerned about the short-term impact of technological change on labour. | ||
== | ==Early life== | ||
Born in London, England, Ricardo was the third surviving of the 17 children of successful stockbroker Abraham Israel Ricardo (1733?–1812) and Abigail (1753–1801), daughter of Abraham Delvalle (also "del Valle"), of a respectable [[Sephardic Jews|Sephardic Jewish]] family that had been settled in England for three generations as "small but prosperous" tobacco and snuff merchants, and had obtained British citizenship. Abigail's sister, Rebecca, was wife of the engraver [[Wilson Lowry]], and mother of the engraver [[Joseph Wilson Lowry]] and the geologist, mineralogist, and author [[Delvalle Lowry]].<ref>David Ricardo, D. Weatherall, Springer Netherlands, 2012, p. 6</ref><ref>Anglo-Jewish Portraits – A Biographical Catalogue of Engraved Anglo-Jewish and Colonial Portraits from the Earliest Times to the Accession of Queen Victoria, Alfred Rubens, Jewish Museum, London, 1935, p. 69</ref><ref name="Heertje">{{cite journal|last=Heertje|first=Arnold|year=2004|title=The Dutch and Portuguese-Jewish background of David Ricardo|journal=European Journal of the History of Economic Thought|volume=11|issue=2|pages=281–294|doi=10.1080/0967256042000209288|s2cid=154424757}}</ref><ref name=":1">{{Cite ODNB|title=The Oxford Dictionary of National Biography|date=2 September 2004|url=http://www.oxforddnb.com/view/article/23471|pages=ref:odnb/23471|editor-last=Matthew|editor-first=H. C. G.|doi=10.1093/ref:odnb/23471|access-date=14 December 2019|editor2-last=Harrison|editor2-first=B.}}</ref> The Ricardo family were Sephardic Jews of [[Portuguese people|Portuguese]] origin who had recently relocated from the [[Dutch Republic]].<ref name="Heertje"/> Ricardo began working with his father at the age of 14. At the age of 21, Ricardo eloped with a [[Quakers|Quaker]], Priscilla Anne Wilkinson, and against his father's wishes, converted to [[Unitarianism]].<ref>Francisco Solano Constancio, Paul Henri Alcide Fonteyraud. 1847. ''[https://fr.wikisource.org/wiki/%C5%92uvres_compl%C3%A8tes_de_David_Ricardo/Notice Œuvres complètes de David Ricardo]'', Guillaumin, (pp. v–xlviii): ''A part sa conversion au Christianisme et son mariage avec une femme qu'il eut l'audace grande d'aimer malgré les ordres de son père''</ref> This religious difference resulted in estrangement from his family, and he was led to adopt a position of independence.<ref>Ricardo, David. 1919. ''Principles of Political Economy and Taxation''. G. Bell, p. lix: "by reason of a religious difference with his father, to adopt a position of independence at a time when he should have been undergoing that academic training"</ref> His father disowned him and his mother apparently never spoke to him again.<ref name=sraffa>{{Citation |author=Sraffa, Piero |author2=David Ricardo |title=The Works and Correspondence of David Ricardo: Volume 10, Biographical Miscellany |publisher=Cambridge University Press |location=Cambridge, UK |year=1955 |page=434 |isbn=0521060753}}</ref> | Born in London, England, Ricardo was the third surviving of the 17 children of successful stockbroker Abraham Israel Ricardo (1733?–1812) and Abigail (1753–1801), daughter of Abraham Delvalle (also "del Valle"), of a respectable [[Sephardic Jews|Sephardic Jewish]] family that had been settled in England for three generations as "small but prosperous" tobacco and snuff merchants, and had obtained British citizenship. Abigail's sister, Rebecca, was wife of the engraver [[Wilson Lowry]], and mother of the engraver [[Joseph Wilson Lowry]] and the geologist, mineralogist, and author [[Delvalle Lowry]].<ref>David Ricardo, D. Weatherall, Springer Netherlands, 2012, p. 6</ref><ref>Anglo-Jewish Portraits – A Biographical Catalogue of Engraved Anglo-Jewish and Colonial Portraits from the Earliest Times to the Accession of Queen Victoria, Alfred Rubens, Jewish Museum, London, 1935, p. 69</ref><ref name="Heertje">{{cite journal|last=Heertje|first=Arnold|year=2004|title=The Dutch and Portuguese-Jewish background of David Ricardo|journal=European Journal of the History of Economic Thought|volume=11|issue=2|pages=281–294|doi=10.1080/0967256042000209288|s2cid=154424757}}</ref><ref name=":1">{{Cite ODNB|title=The Oxford Dictionary of National Biography|date=2 September 2004|url=http://www.oxforddnb.com/view/article/23471|pages=ref:odnb/23471|editor-last=Matthew|editor-first=H. C. G.|doi=10.1093/ref:odnb/23471|access-date=14 December 2019|editor2-last=Harrison|editor2-first=B.}}</ref> The Ricardo family were Sephardic Jews of [[Portuguese people|Portuguese]] origin who had recently relocated from the [[Dutch Republic]].<ref name="Heertje"/> Ricardo began working with his father at the age of 14. At the age of 21, Ricardo eloped with a [[Quakers|Quaker]], Priscilla Anne Wilkinson, and against his father's wishes, converted to [[Unitarianism]].<ref>Francisco Solano Constancio, Paul Henri Alcide Fonteyraud. 1847. ''[https://fr.wikisource.org/wiki/%C5%92uvres_compl%C3%A8tes_de_David_Ricardo/Notice Œuvres complètes de David Ricardo]'', Guillaumin, (pp. v–xlviii): ''A part sa conversion au Christianisme et son mariage avec une femme qu'il eut l'audace grande d'aimer malgré les ordres de son père''</ref> This religious difference resulted in estrangement from his family, and he was led to adopt a position of independence.<ref>Ricardo, David. 1919. ''Principles of Political Economy and Taxation''. G. Bell, p. lix: "by reason of a religious difference with his father, to adopt a position of independence at a time when he should have been undergoing that academic training"</ref> His father disowned him and his mother apparently never spoke to him again.<ref name=sraffa>{{Citation |author=Sraffa, Piero |author2=David Ricardo |title=The Works and Correspondence of David Ricardo: Volume 10, Biographical Miscellany |publisher=Cambridge University Press |location=Cambridge, UK |orig-year=1955 |year=1973 |page=434 |isbn=0521060753}}</ref> | ||
Following this estrangement he went into business for himself with the support of Lubbocks and Forster, an eminent banking house. He made the bulk of his fortune by profitably financing Government borrowing | Following this estrangement he went into business for himself with the support of Lubbocks and Forster, an eminent banking house. He made the bulk of his fortune by profitably financing Government borrowing. | ||
==Parliamentary record== | ==Parliamentary record== | ||
As MP for [[Portarlington (UK Parliament constituency)|Portarlington]], Ricardo voted with the opposition in support of liberal political movements in [[Naples]] and [[Sicily]], and for inquiry into the administration of justice in [[Tobago]]. He | As MP for [[Portarlington (UK Parliament constituency)|Portarlington]], Ricardo voted with the opposition in support of liberal political movements in [[Naples]] and [[Sicily]], and for inquiry into the administration of justice in [[Tobago]]. He voted for repeal of the [[Six Acts|Blasphemous and Seditious Libels Act]]; then for inquiry into the [[Peterloo Massacre]]; and, in 1821, for abolition of the [[death penalty]] for [[forgery]]. | ||
He supported [[free trade]]. In 1821 he voted against renewal of the sugar duties, and objected to the higher duty on ''East'' Indian as opposed to ''West'' Indian produce. He opposed the timber duties. He voted silently for parliamentary reform and in 1822 spoke in its favour at the Westminster anniversary reform dinner; and again voted for criminal law reform. | He supported [[free trade]]. In 1821 he voted against renewal of the sugar duties, and objected to the higher duty on ''East'' Indian as opposed to ''West'' Indian produce. He opposed the timber duties. He voted silently for parliamentary reform and in 1822 spoke in its favour at the Westminster anniversary reform dinner; and again voted for criminal law reform. | ||
Ricardo believed that increasing imports and free trade boosted the well-being of mankind by increasing the amount of goods cheaply available for subsistence and consumption. He was said to have "possessed an extraordinary quickness in perceiving in the turns of the market any accidental difference which might arise between the relative price of different stocks".<ref>{{cite news |last1=Zweig |first1=Jason |title=Economist David Ricardo |url=https://www.wsj.com/articles/BL-MBB-60411 |work=The Wall Street Journal |date=26 May 2017 |access-date=16 April 2021}}</ref> He grew his wealth dealing in securities during the Revolutionary and [[Napoleonic | Ricardo believed that increasing imports and free trade boosted the well-being of mankind by increasing the amount of goods cheaply available for subsistence and consumption. He was said to have "possessed an extraordinary quickness in perceiving in the turns of the market any accidental difference which might arise between the relative price of different stocks".<ref>{{cite news |last1=Zweig |first1=Jason |title=Economist David Ricardo |url=https://www.wsj.com/articles/BL-MBB-60411 |work=The Wall Street Journal |date=26 May 2017 |access-date=16 April 2021}}</ref> He grew his wealth dealing in securities during the Revolutionary and [[Napoleonic Wars]]. | ||
As the Napoleonic Wars waged on, Ricardo developed a disdain for the [[Corn Laws]] imposed by the British to encourage exports. Notably, government intervention in the [[grain trade]] can be traced as far back as the 1400s; and thereafter trade was controlled, regulated, and taxed. Meanwhile, England developed a capitalist economy involving workers and landlords generating and consuming incomes and capital accumulations that depended entirely on capitalists' profits,<ref>{{cite book |last1=King |first1=John |title=David Ricardo |date=2013 |publisher=Palgrave Macmillan |location=UK |isbn=978-0230289963 |page=88}}</ref> and these key economic elements were under perpetual pressure during the eighteenth and early nineteenth centuries. | As the Napoleonic Wars waged on, Ricardo developed a disdain for the [[Corn Laws]] imposed by the British to encourage exports. Notably, government intervention in the [[grain trade]] can be traced as far back as the 1400s; and thereafter trade was controlled, regulated, and taxed. Meanwhile, England developed a capitalist economy involving workers and landlords generating and consuming incomes and capital accumulations that depended entirely on capitalists' profits,<ref>{{cite book |last1=King |first1=John |title=David Ricardo |date=2013 |publisher=Palgrave Macmillan |location=UK |isbn=978-0230289963 |page=88}}</ref> and these key economic elements were under perpetual pressure during the eighteenth and early nineteenth centuries. | ||
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Of David Ricardo, his friend John Louis Mallett commented: " ... he meets you upon every subject that he has studied with a mind made up, and opinions in the nature of mathematical truths. He spoke of parliamentary reform and ballot as a man who would bring such things about, and destroy the existing system tomorrow, if it were in his power, and without the slightest doubt on the result ... It is this very quality of the man's mind, his entire disregard of experience and practice, which makes me doubtful of his opinions on political economy." | Of David Ricardo, his friend John Louis Mallett commented: " ... he meets you upon every subject that he has studied with a mind made up, and opinions in the nature of mathematical truths. He spoke of parliamentary reform and ballot as a man who would bring such things about, and destroy the existing system tomorrow, if it were in his power, and without the slightest doubt on the result ... It is this very quality of the man's mind, his entire disregard of experience and practice, which makes me doubtful of his opinions on political economy." | ||
== | ==Later life== | ||
A popular story states that he made his fortune as a result of speculation on the outcome of the [[Battle of Waterloo]]: in Ricardo's obituary, published on 14 September 1823,''[[The Sunday Times]]'' reported that during the battle Ricardo "netted upwards of a million sterling", a huge sum at the time, and this was later popularised by the economist [[Paul Samuelson]]. In reality, Ricardo was already very rich, and in June 1815, sold his latest government stock before the result of the battle was known in London, missing half of the rise.<ref>Wilfried Parys, [https://www.eshet-conference.net/lille/file/edl/?file=dVg5YURiRmc1TTZKOHhTamhZYmVwY0R4b3d1a0xuTkdTS0F5VlNoc2JaamRmTk5tL0hyT3h1bEJMeE5ha0g5WmNKbEhNRUV2UWhYbm9tL0ZEbVVPL09CZ2Y5eE1Ic092S3NFY01FSjVCc2ovSjNHOEQxL3pHeU9ONGZXME1VZ2p6U2ZXV0pyeEJOaWFXbzVTbjNIM3hoU1dzWG9GWitlUEh3UVNURXN4YTc3Y0tTdzVaaExVVTdRNU8vOXVRQkxqQW04Rk1pb3NDQXh3c1p0YzN4Wm91Zz09 "Samuelsonian legends about Ricardo's finances lack historical evidence"]</ref> | |||
He | He subsequently purchased [[Gatcombe Park]], an estate in [[Gloucestershire]], and retired to the country. He was appointed [[High Sheriff of Gloucestershire]] for 1818–19.<ref>{{London Gazette|issue=17326|page=188|date=24 January 1818}}</ref> In August 1818 he bought Lord Portarlington's seat in Parliament for £4,000, as part of the terms of a loan of £25,000. His record in Parliament was that of an earnest reformer. He held the seat until his death five years later.<ref>{{Cite web|title=David Ricardo {{!}} Biography, Theory, Comparative Advantage, & Works|url=https://www.britannica.com/biography/David-Ricardo|access-date=7 July 2021|website=Encyclopædia Britannica|language=en}}</ref> | ||
Ricardo is buried in an ornate grave in the churchyard of [[Nicholas of Myra|Saint Nicholas]] in Hardenhuish, now a suburb of [[Chippenham]], Wiltshire. At the time of his death, his assets were estimated at £675,000–£775,000.<ref name=":1" /> | == Personal life and death == | ||
He and his wife Priscilla had eight children together including [[Osman Ricardo]] (1795–1881, MP for [[Worcester (UK Parliament constituency)|Worcester]] 1847–1865), [[David Ricardo (the younger)|David Ricardo]] (1803–1864, MP for [[Stroud (UK Parliament constituency)|Stroud]] 1832–1833) and Mortimer Ricardo, who served as an officer in the [[Life Guards (British Army)|Life Guards]] and was a [[deputy lieutenant]] for [[Oxfordshire]].<ref>{{cite web |url=http://www.histparl.ac.uk/volume/1820-1832/member/ricardo-david-1772-1823 |title=Ricardo, David (1772–1823), of Gatcombe Park, Minchinhampton, Glos. and 56 Upper Brook Street, Grosvenor Square, Mdx. |publisher=History of Parliament Online |access-date=18 September 2013 |archive-date=28 August 2019 |archive-url=https://web.archive.org/web/20190828221832/http://www.histparl.ac.uk/volume/1820-1832/member/ricardo-david-1772-1823 |url-status=dead }}</ref> | |||
Ricardo was a close friend of [[James Mill]]. Other notable friends included [[Jeremy Bentham]] and [[Thomas Malthus]], with whom Ricardo had a considerable debate (in correspondence) over such things as the role of landowners in a society. He also was a member of Malthus' [[Political Economy Club]], and a member of the [[King of Clubs (Whig club)|King of Clubs]]. He was one of the original members of [[The Geological Society]].<ref name="sraffa" /> His youngest sister was author [[George Richardson Porter#Family|Sarah Ricardo-Porter]] (e.g., ''Conversations in Arithmetic'').Lat | |||
Ten years after retiring and four years after entering Parliament, Ricardo died at 51 from an infection of the middle ear that spread into his brain and induced [[septicaemia]]. He is buried in an ornate grave in the churchyard of [[Nicholas of Myra|Saint Nicholas]] in Hardenhuish, now a suburb of [[Chippenham]], Wiltshire. At the time of his death, his assets were estimated at £675,000–£775,000.<ref name=":1" /> | |||
==Ideas== | ==Ideas== | ||
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===Rent=== | ===Rent=== | ||
{{Main|Law of rent}} | {{Main|Law of rent}} | ||
Ricardo contributed to the development of theories of rent, wages, and profits. He defined [[Economic rent|rent]] as "the difference between the produce obtained by the employment of two equal quantities of capital and labour."<ref name=":2">{{Cite web |last=Ricardo |first=David |date=1817 |title=On The Principles of Political Economy and Taxation, by David Ricardo, 1817 |url=https://www.marxists.org/reference/subject/economics/ricardo/tax/ch02.htm |access-date=2024-05-13 |website=www.marxists.org |at=Chapter 2: Rent}}</ref> Ricardo believed that the process of economic development, which increased land use and eventually led to the cultivation of poorer land, principally benefited landowners. According to Ricardo, such premium over "real social value" that is reaped due to ownership constitutes value to an individual but is at best<ref>''On The Principles of Political Economy and Taxation'' London: John Murray, Albemarle-Street, by David Ricardo, 1817 (3rd edition 1821) – Chapter 6, "On Profits": paragraph 28, "Thus, taking the former ..." and paragraph 33, "There can, however...."</ref> a paper monetary return to "society". The portion of such purely individual benefit that accrues to scarce resources Ricardo labels "rent". | Ricardo contributed to the development of theories of rent, wages, and profits. He defined [[Economic rent|rent]] as "the difference between the produce obtained by the employment of two equal quantities of capital and labour."<ref name=":2">{{Cite web |last=Ricardo |first=David |date=1817 |title=On The Principles of Political Economy and Taxation, by David Ricardo, 1817 |url=https://www.marxists.org/reference/subject/economics/ricardo/tax/ch02.htm |access-date=2024-05-13 |website=www.marxists.org |at=Chapter 2: Rent}}</ref> Ricardo believed that the process of economic development, which increased land use and eventually led to the cultivation of poorer land, principally benefited landowners. According to Ricardo, such premium over "real social value" that is reaped due to ownership constitutes value to an individual but is at best<ref>''On The Principles of Political Economy and Taxation'' London: John Murray, Albemarle-Street, by David Ricardo, 1817 (3rd edition 1821) – Chapter 6, "On Profits": paragraph 28, "Thus, taking the former ..." and paragraph 33, "There can, however...."</ref> a paper monetary return to "society". The portion of such purely individual benefit that accrues to scarce resources Ricardo labels "rent". | ||
In particular, Ricardo postulates that rent is a result of increased populations which results in assets growing scarce and in some cases diminished returns of which were once abundant. Ricardo breaks down this premise by first supposing there are three fields of | In particular, Ricardo postulates that rent is a result of increased populations which results in assets growing scarce and in some cases diminished returns of which were once abundant. Ricardo breaks down this premise by first supposing there are three fields of land – No. 1, 2, 3, – to yield corn, with an equal employment of capital and labour. Initially land No. 1 is cultivated and is very productive as measured through the abundant surplus. Over time this abundant surplus becomes diminished as the result of an increase in population, which subsequently creates an increased demand for food. The less desired land, No. 2, must now be cultivated and eventually so must land No. 3 and so on and so forth. For Ricardo each new cultivated results in diminished surplus as the quality of land fails to yield the equal of that before it. In light of such diminishing surplus landowners see opportunities to charge rent as a means to compensate for the loss of returns on output.<ref name=":2" /> | ||
===Model-making=== | ===Model-making=== | ||
According to [[sociology of quantification|sociologist of quantification]] [[Mary S. Morgan]] David Ricardo can be considered ''one of the pioneers in economic modelling''.<ref name="Morgan">{{cite book | vauthors=((Morgan, M.S.)) | year=2012 | title=The World in the Model: How Economists Work and Think | publisher=Cambridge University Press | isbn=978-1107002975}}.</ref>{{rp|45}} In studying rents, for example, Ricardo experiments | According to [[sociology of quantification|sociologist of quantification]] [[Mary S. Morgan]] David Ricardo can be considered ''one of the pioneers in economic modelling''.<ref name="Morgan">{{cite book | vauthors=((Morgan, M.S.)) | year=2012 | title=The World in the Model: How Economists Work and Think | publisher=Cambridge University Press | isbn=978-1107002975}}.</ref>{{rp|45}} In studying rents, for example, Ricardo experiments numerically to determine the relative share of profit accruing to land owner, capital holder and laborers through what Morgan calls 'numerical model farming'. In his numerical and verbal accounts Ricardo tests different improvements in capital, technology or labour to increase the yield of a farm, paralleling actual experiments run by his contemporaries such as [[Charles Townshend, 2nd Viscount Townshend#"Turnip" Townshend|"Turnip" Townshend]].<ref name="Morgan"/>{{rp|61}} | ||
===Ricardo's theories of wages and profits=== | ===Ricardo's theories of wages and profits=== | ||
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==Ricardian equivalence== | ==Ricardian equivalence== | ||
{{main|Ricardian equivalence}} | {{main|Ricardian equivalence}} | ||
Another idea associated with Ricardo is Ricardian equivalence, an argument suggesting that in some circumstances a government's choice of how to pay for its spending (''i.e.,'' whether to use tax revenue or issue debt and run a deficit) might have no effect on the economy. This is due to the fact the public saves its excess money to pay for expected future tax increases that will be used to pay off the debt. Ricardo notes that the proposition is theoretically implied in the presence of intertemporal optimisation by rational taxpayers: but that since taxpayers do not act so rationally, the proposition fails to be true in practice. Thus, while the proposition bears his name, he does not seem to have believed it. Economist [[Robert Barro]] is responsible for its modern prominence. | Another idea associated with Ricardo is Ricardian equivalence, an argument suggesting that in some circumstances a government's choice of how to pay for its spending (''i.e.,'' whether to use tax revenue or issue debt and run a deficit) might have no effect on the economy. This is due to the fact the public saves its excess money to pay for expected future tax increases that will be used to pay off the debt. Ricardo notes that the proposition is theoretically implied in the presence of intertemporal optimisation by rational taxpayers: but that since taxpayers do not act so rationally, the proposition fails to be true in practice. Thus, while the proposition bears his name, he does not seem to have believed it. Economist [[Robert Barro]] is responsible for its modern prominence. | ||
==Influence and intellectual legacy== | ==Influence and intellectual legacy== | ||
David Ricardo's ideas had a tremendous influence on later developments in economics. US economists rank Ricardo as the second most influential economic thinker, behind Adam Smith, prior to the twentieth century.<ref>Davis, William L., Bob Figgins, David Hedengren, and Daniel B. Klein. "Economics Professors' Favorite Economic Thinkers, Journals and Blogs (along with Party and Policy Views)", ''Econ Journal Watch'' 8(2): 126–146, May 2011 [ | David Ricardo's ideas had a tremendous influence on later developments in economics. US economists rank Ricardo as the second most influential economic thinker, behind Adam Smith, prior to the twentieth century.<ref>Davis, William L., Bob Figgins, David Hedengren, and Daniel B. Klein. "Economics Professors' Favorite Economic Thinkers, Journals and Blogs (along with Party and Policy Views)", ''Econ Journal Watch'' 8(2): 126–146, May 2011 [https://econjwatch.org/articles/economics-professors-favorite-economic-thinkers-journals-and-blogs-along-with-party-and-policy-views].</ref> | ||
===Ricardian socialists=== | ===Ricardian socialists=== | ||
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====Neo-Ricardian trade theory==== | ====Neo-Ricardian trade theory==== | ||
Inspired by [[Piero Sraffa]], a new strand of trade theory emerged and was named neo-Ricardian trade theory. The main contributors include [[Ian Steedman]] and [[Stanley Metcalfe (trade theorist)|Stanley Metcalfe]]. They have criticised neoclassical international trade theory, namely the [[Heckscher–Ohlin model]] on the basis that the notion of capital as primary factor has no method of measuring it before the determination of profit rate (thus trapped in a logical vicious circle).<ref>{{cite book |editor-last=Steedman |editor-first=Ian |year=1979 |title=Fundamental Issues in Trade Theory |location=London |publisher=Macmillan |isbn=0333258347}}</ref><ref>{{cite book |last=Steedman |first=Ian |title=Trade Amongst Growing Economies |publisher=Cambridge University Press |location=Cambridge, UK |year=1979 | | Inspired by [[Piero Sraffa]], a new strand of trade theory emerged and was named neo-Ricardian trade theory. The main contributors include [[Ian Steedman]] and [[Stanley Metcalfe (trade theorist)|Stanley Metcalfe]]. They have criticised neoclassical international trade theory, namely the [[Heckscher–Ohlin model]] on the basis that the notion of capital as primary factor has no method of measuring it before the determination of profit rate (thus trapped in a logical vicious circle).<ref>{{cite book |editor-last=Steedman |editor-first=Ian |year=1979 |title=Fundamental Issues in Trade Theory |location=London |publisher=Macmillan |isbn=0333258347}}</ref><ref>{{cite book |last=Steedman |first=Ian |title=Trade Amongst Growing Economies |publisher=Cambridge University Press |location=Cambridge, UK |year=1979 |page={{Page needed |date=April 2011}} |isbn=0521226716 |url-access=registration |url=https://archive.org/details/tradeamongstgrow0000stee }}</ref> This was a second round of the [[Cambridge capital controversy]], this time in the field of international trade.<ref>{{cite book |first=Chris |last=Edwards |year=1985 |title=The Fragmented World: Competing Perspectives on Trade, Money, and Crisis |location=London and New York |publisher=Methuen & Co. |chapter=§ 3.2 The 'Sraffian' Approach to Trade Theory |pages=48–51 |isbn=0416733905}}</ref> Depoortère and Ravix judge that neo-Ricardian contribution failed without giving effective impact on neoclassical trade theory, because it could not offer "a genuine alternative approach from a classical point of view."<ref>Christophe Depoortère, Joël Thomas Ravix; "The classical theory of international trade after Sraffa". ''Cahiers d'économie Politique / Papers in Political Economy'' (69): 203–234, February 2015.</ref> | ||
====Evolutionary growth theory==== | ====Evolutionary growth theory==== | ||
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====Contemporary theories==== | ====Contemporary theories==== | ||
{{Main|International trade theory#Ricardian trade theory extensions}} | {{Main|International trade theory#Ricardian trade theory extensions}} | ||
Ricardo's idea was even expanded to the case of continuum of goods by Dornbusch, Fischer, and Samuelson<ref>{{citation |jstor=1828066 |pages=823–839 |last1=Dornbusch |first1=R. |last2=Fischer |first2=S. |last3=Samuelson |first3=P.A. |title=Comparative Advantage, Trade, and Payments in a Ricardian Model with a Continuum of Goods |volume=67 |issue=5 |journal=The American Economic Review |year=1977 |url=http://www.stanford.edu/~rstaiger/Comparativ-goods.pdf |url-status=dead |archive-url=https://web.archive.org/web/20110516042952/http://www.stanford.edu/~rstaiger/Comparativ-goods.pdf |archive-date=16 May 2011 }}</ref> This formulation is employed for example by Matsuyama<ref>{{Citation |last1=Matsuyama |first1=K. |year=2000 |title=A Ricardian Model with a Continuum of Goods under Nonhomothetic Preferences: Demand Complementarities, Income Distribution, and North–South Trade |journal=Journal of Political Economy |volume=108 |issue=6 |pages=1093–1120 |url=http://darkwing.uoregon.edu/~bruceb/Peter%20W.pdf |archive-url=https://web.archive.org/web/20120918000912/http://darkwing.uoregon.edu/~bruceb/Peter%20W.pdf |archive-date=2012-09-18 |url-status=live |doi=10.1086/317684 |s2cid=154166748 |postscript=.}}</ref> and others. | Ricardo's idea was even expanded to the case of continuum of goods by Dornbusch, Fischer, and Samuelson<ref>{{citation |jstor=1828066 |pages=823–839 |last1=Dornbusch |first1=R. |last2=Fischer |first2=S. |last3=Samuelson |first3=P.A. |title=Comparative Advantage, Trade, and Payments in a Ricardian Model with a Continuum of Goods |volume=67 |issue=5 |journal=The American Economic Review |year=1977 |url=http://www.stanford.edu/~rstaiger/Comparativ-goods.pdf |url-status=dead |archive-url=https://web.archive.org/web/20110516042952/http://www.stanford.edu/~rstaiger/Comparativ-goods.pdf |archive-date=16 May 2011 }}</ref> This formulation is employed for example by Matsuyama<ref>{{Citation |last1=Matsuyama |first1=K. |year=2000 |title=A Ricardian Model with a Continuum of Goods under Nonhomothetic Preferences: Demand Complementarities, Income Distribution, and North–South Trade |journal=Journal of Political Economy |volume=108 |issue=6 |pages=1093–1120 |url=http://darkwing.uoregon.edu/~bruceb/Peter%20W.pdf |archive-url=https://web.archive.org/web/20120918000912/http://darkwing.uoregon.edu/~bruceb/Peter%20W.pdf |archive-date=2012-09-18 |url-status=live |doi=10.1086/317684 |s2cid=154166748 |postscript=.}}</ref> and others. | ||
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====Unequal exchange==== | ====Unequal exchange==== | ||
Chris Edward includes Emmanuel's [[unequal exchange]] theory among variations of neo-Ricardian trade theory.<ref>Chris Edwards 1985 ''The Fragmented World: Competing Perspectives on Trade, Money and Crisis'', London and New York: Methuen. Chapter 4.</ref> [[Arghiri Emmanuel]] argued that the [[Third World]] is poor because of the international exploitation{{clarify|date=January 2015}}<!-- not clear what kind of exploitation is being described here? | Chris Edward includes Emmanuel's [[unequal exchange]] theory among variations of neo-Ricardian trade theory.<ref>Chris Edwards 1985 ''The Fragmented World: Competing Perspectives on Trade, Money and Crisis'', London and New York: Methuen. Chapter 4.</ref> [[Arghiri Emmanuel]] argued that the [[Third World]] is poor because of the international exploitation{{clarify|date=January 2015}}<!-- not clear what kind of exploitation is being described here? is he talking about slave conditions in Sudan? or the entering into of exchange at wages lower than those of particular other countries/cities? or what? --> of labour.<ref>{{citation |last=Emmanuel |first=Arghiri |title=Unequal exchange; a study of the imperialism of trade |publisher=Monthly Review Press |location=New York |year=1972 |isbn=0853451885 |url=https://archive.org/details/unequalexchanges0000emma/page/ }}{{page needed|date=March 2022}}</ref><!-- with no url and no page number, it is difficult to verify this source -->{{verify source|date=January 2015}} | ||
The unequal exchange theory of trade has been influential to the (new) [[dependency theory]].<ref>{{citation |doi=10.1016/0305-750X(78)90051-7 |title=Dependency: A formal theory of underdevelopment or a methodology for the analysis of concrete situations of underdevelopment? |year=1978 |last1=Palma |first1=G |journal=World Development |volume=6 |issue=7–8 |pages=881–924}}</ref> | The unequal exchange theory of trade has been influential to the (new) [[dependency theory]].<ref>{{citation |doi=10.1016/0305-750X(78)90051-7 |title=Dependency: A formal theory of underdevelopment or a methodology for the analysis of concrete situations of underdevelopment? |year=1978 |last1=Palma |first1=G |journal=World Development |volume=6 |issue=7–8 |pages=881–924 |bibcode=1978WoDev...6..881P }}</ref> | ||
==Publications== | ==Publications== | ||
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==Further reading== | ==Further reading== | ||
* {{cite book|editor-first=Giovanni A. |editor-last=Caravale |title=The Legacy of Ricardo |year=1985 |publisher= Basil Blackwell |location= Oxford |isbn= 0631136177 }} | * {{cite book|editor-first=Giovanni A. |editor-last=Caravale |title=The Legacy of Ricardo |year=1985 |publisher= Basil Blackwell |location= Oxford |isbn= 0631136177 }} | ||
* {{cite encyclopedia |title=David Ricardo (1772–1823) |url= | * {{cite encyclopedia |title=David Ricardo (1772–1823) |url=https://www.econlib.org/library/Enc/bios/Ricardo.html |encyclopedia=[[The Concise Encyclopedia of Economics]] |edition=2nd |series=[[Library of Economics and Liberty]] |publisher=[[Liberty Fund]] |year=2008|isbn=978-0865976665 |editor-first=David R.|editor-last=Henderson |editor-link=David R. Henderson |pages=579–581 }} | ||
* {{cite book|last=Skousen|first= Mark |author-link=Mark Skousen |editor-first=Ronald |editor-last=Hamowy |editor-link=Ronald Hamowy |title=The Encyclopedia of Libertarianism |chapter= | * {{cite book|last=Skousen|first= Mark |author-link=Mark Skousen |editor-first=Ronald |editor-last=Hamowy |editor-link=Ronald Hamowy |title=The Encyclopedia of Libertarianism |chapter= Ricardo, David (1772–1823) |chapter-url=https://sk.sagepub.com/reference/libertarianism/n265.xml|url= https://books.google.com/books?id=yxNgXs3TkJYC |year=2008 |publisher= [[SAGE Publishing|Sage]]; [[Cato Institute]] |location= Thousand Oaks, CA |doi=10.4135/9781412965811.n222 |isbn= 978-1412965804 |oclc=750831024| lccn = 2008009151 |pages=433–434 |quote= }} | ||
==External links== | ==External links== | ||
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[[Category:1772 births]] | [[Category:1772 births]] | ||
[[Category:1823 deaths]] | [[Category:1823 deaths]] | ||
[[Category:Ricardo family]] | [[Category:Ricardo family|David]] | ||
[[Category:19th-century British economists]] | [[Category:19th-century British economists]] | ||
[[Category:19th-century English writers]] | [[Category:19th-century English writers]] | ||
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[[Category:Converts to Unitarianism from Judaism]] | [[Category:Converts to Unitarianism from Judaism]] | ||
[[Category:English economists]] | [[Category:English economists]] | ||
[[Category: | [[Category:British businesspeople in finance]] | ||
[[Category: | [[Category:British investors]] | ||
[[Category:English Sephardi Jews]] | [[Category:English Sephardi Jews]] | ||
[[Category:English people of Portuguese-Jewish descent]] | [[Category:English people of Portuguese-Jewish descent]] | ||