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 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.

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 ?
1950-1973): The works and correspondence of David Ricardo, 11 volumenes, Cambridge university press.
Entry 4929 concerns the Letters written by David Ricardo during a tour on the continent in the year 1822, to his eldest son Osman (David Ricardo 1891).
Algunos encuentran que esa teoria es la teoria de la ventaja comparativa de David Ricardo.
Economic giants such as Adam Smith, David Ricardo, and John Maynard Keynes could never land a university job today, he writes.
From the writings of the earliest modern commentators on the drivers of socio-economic growth and decline -- Adam Smith, Edward Gibbon, Thomas Malthus, David Ricardo, and Karl Marx -- we see that concern about exhausting resources is not new.
We've known since Adam Smith and David Ricardo first published (1776 and 1817 for those keeping count at home) that the value of trade is that it makes the things we buy cheaper or better at the same price than if we made them ourselves.
Chapter 1, "Social Philosophy of Classical Economics," discusses the views of such classical writers as Adam Smith, David Ricardo, Thomas Malthus, and John Stuart Mill on varying issues, including social classes, in particular landlords, businesspeople, and the poor; the proper role of government; war; and slavery.
The silver-haired, well-spoken author of Exporting America even lardered his testimony with references to the Federal Reserve System and dropped the names of economic giants Adam Smith and David Ricardo.
Since at least the work of David Ricardo (1772-1823), economists have known that international trade is desirable and beneficial for both trading partners.
The lack of accurate information offered opportunities for tremendous profit for economist David Ricardo and banker Nathan Rothschild.
David Ricardo adopted this concept in the 19th century, refined it, and used the resulting theory to describe the burgeoning capitalist system.
Two centuries ago, economists such as Adam Smith and David Ricardo laid down classical theories that market efficiencies need some equality between seller and purchaser.