David Ricardo


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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 SmithSmith, Adam,
1723–90, Scottish economist, educated at Glasgow and Oxford. He became professor of moral philosophy at the Univ. of Glasgow in 1752, and while teaching there wrote his Theory of Moral Sentiments
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'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.

Bibliography

See studies by J. H. Hollander (1910, repr. 1968), O. St. Clair (1957, repr. 1965), and M. Blang (1958, repr. 1973).

Ricardo, David

 

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.

WORKS

In Russian translation:
Soch., vols. 1–5. Moscow, 1961.

REFERENCES

Marx, 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.
References in periodicals archive ?
Being highly interested in the economic and social analysis of David Ricardo and Karl Marx as great thinkers in economics, I was aware of Sraffa's description of his search for the special version of the Principles.
A partir dos debates sobre a relacao entre riqueza e natureza do valor, sobre a questao da determinacao da magnitude do valor e sobre sua relacao ou nao com um sistema de precos, sao contrapostas teses centrais das concepcoes de Karl Marx, David Ricardo e Adam Smith, reivindicando o carater social do valor e a compreensao do capitalismo como conjunto de relacoes sociais.
The book goes on to discuss David Ricardo, Karl Marx, John Maynard Keynes, Thomas Malthus, F.A.
El libro presenta de manera original lo que, segun el profesor Bolanos, constituye el nucleo de la teoria clasica de los precios relativos de equilibrio de Adam Smith, David Ricardo y Piero Sraffa.
Mankiw later quoted Adam Smith: "If a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy it off them with some part of the produce of our own industry employed in a way in which we have some advantage." This has not only been the governing principle of capitalism but, polished by David Ricardo, turned into a winning proposition.
Contrary to David Ricardo's view that competitively issued notes are a kind of money, if they are convertible at a fixed rate into some external asset, they are in fact a kind of credit.
James Galbraith has provided a provocative essay that incorporates-in an almost stream-of-consciousness style-his commentary on topics ranging from David Ricardo to Robert Rubin.
It was called the theory of comparative advantage that went all the way back to Robert Torrens and David Ricardo almost two centuries ago.
It caused an uproar by rejecting the classical theories of economists like Adam Smith, David Ricardo and John Stuart Mill.