Also found in: Dictionary, Thesaurus, Financial, Wikipedia.
Related to David Ricardo: John Stuart Mill
Ricardo, David,1772–1823, British economist, of Dutch-Jewish parentage. At the age of 20 he entered business as a stockbroker and was so skillful in the management of his affairs that within five years he had amassed a huge fortune. He then turned much of his attention to scientific topics, and in 1799, after reading Adam Smith's The Wealth of Nations, began to study political economy. However, 10 years elapsed before the appearance of his first writings on the subject, a series of letters to the Morning Chronicle. A number of pamphlets and tracts followed, in turn succeeded by Ricardo's major work, The Principles of Political Economy and Taxation (1817). In that book he presented most of his important theories, especially those concerned with the determination of wages and value. For the problem of wages he proposed the "iron law of wages," according to which wages tend to stabilize around the subsistence level. Any rise in wage rates above subsistence will cause the working population to increase to the point that heightened competition among the glut of laborers will merely cause their wages to fall back to the subsistence level. As far as value was concerned, Ricardo stated that the value of almost any good was, essentially, a function of the labor needed to produce it. According to his labor theory of value, a clock costing $100 required 10 times as much labor for its production as did a pair of shoes costing $10. Ricardo was also concerned with the subject of international trade, and for that he developed the theory of comparative advantage, still widely accepted among economists. In a now classic illustration, Ricardo explained how it was advantageous for England to produce cloth and Portugal to produce wine, as long as both countries traded freely with each other, even though Portugal might have produced both wine and cloth at a lower cost than England did. Although his publications were often turgidly written, with little of the insight and breadth of knowledge that characterized Adam Smith's work, Ricardo was an enormously influential economic thinker. His rigidly deductive and scientific method of analysis served as a model for subsequent work in economics.
See studies by J. H. Hollander (1910, repr. 1968), O. St. Clair (1957, repr. 1965), and M. Blang (1958, repr. 1973).
Born Apr. 19, 1772, in London; died Sept. 11, 1823, in Gloucestershire. English economist. Ideologist of the industrial bourgeoisie in its struggle against the landed aristocracy during the industrial revolution.
Ricardo came from a wealthy bourgeois family. From 1793 through 1812 he was engaged in commerce. Subsequently, he concentrated on science. Ricardo’s works are the pinnacle of classical English bourgeois political economy. His main work was the Principles of Political Economy and Taxation (1817).
K. Marx wrote a comprehensive critique of Ricardo’s economic views, pointing out that they were of historical significance for the development of the science of economics chiefly because they represented an attempt to study the economic relations of capitalism from the standpoint of the labor theory of value. Marx observed that this vantage point opened the possibility of disclosing, for the first time, the internal laws of the capitalist mode of production. However, Ricardo was not able to take advantage of this potential in his method of analysis because the bourgeois class essence of his views led him to adopt a metaphysical approach.
Repudiating A. Smith’s proposition that value is determined by labor only in the “primitive condition of society,” Ricardo demonstrated that the value of goods, the sole source of which is the labor of the worker, is the basis for wages, profits, interest, and rent—the income of various classes of bourgeois society. Ricardo showed that the capitalist’s profit is the unpaid labor of the worker, but he was unable to explain the origin of profit from the standpoint of the law of value, and he failed to discover the law of surplus value. In his law of the inverse proportion between the workers’ wages and the capitalists’ profits, Ricardo in effect revealed the opposition of the economic interests of the proletariat to those of the bourgeoisie. However, the bourgeois narrowness of his doctrine is revealed in his belief that capitalism is the only possible and the only natural system and in his conviction that its economic laws are universal and eternal.
WORKSIn Russian translation:
Soch., vols. 1–5. Moscow, 1961.
REFERENCESMarx, K. K kritike politicheskoi ekonomii. In K. Marx and F. Engels, Soch., 2nd ed., vol. 13.
Marx, K. Kapital, vols. 1–3. Ibid., vols. 23–25.
Marx, K. “Teorii pribavochnoi stoimosti” (vol. 4 of Kapital). Ibid., vol. 26.
Vygodskii, V. S. K istorii sozdaniia “Kapitala.” Moscow, 1970. Chapter 3.
Afanas’ev, V. S. Etapy razvitiia burzhuaznoi politicheskoi ekonomii. Moscow, 1971. Chapter 3.
Anikin, A. V. Iunost’ Nauki. Moscow, 1971. Chapters 11–13.