Naomi Wolf
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About the David Ricardo
David Ricardowas a British political economist, politician, and member of Parliament. He is recognized as one of the most influential classical economists, alongside figures such as Thomas Malthus, Adam Smith and James Mill.
Ricardo was born in London as the third surviving child of a successful stockbroker and his wife. He came from a 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 Malthus, engaging in debates over various topics. Ricardo was also a member of The Geological Society, and his youngest sister was an author.
As MP for Portarlington, Ricardo advocated for liberal political movements and reforms, including free trade, parliamentary reform, and criminal law reform. He believed free trade increased the well-being of people by making goods more affordable. Ricardo notably opposed the Corn Laws, which he saw as barriers to economic growth. His friend John Louis Mallett described Ricardo’s conviction in his beliefs, though he expressed doubts about Ricardo’s disregard for experience and practice. Ricardo died at 51 from an ear infection that led to septicaemia (sepsis). He left behind a considerable fortune and a lasting legacy, with his free trade views eventually becoming public policy in Britain.
Ricardo wrote his first economics article at age 37, advocating for a reduction in the note-issuing of the Bank of England. He was also an abolitionist and believed in the autonomy of a central bank as the issuer of money. Ricardo worked on fixing issues in Adam Smith’s Labour Theory of Value, stating that the value of a commodity depends on the labour necessary for its production. He contributed to the development of theories of rent, wages, and profits, defining rent as the difference between the produce obtained by employing equal quantities of capital and labour. Ricardo’s Theory of Profit posited that as real wages increase, real profits decrease due to the revenue split between profits and wages.
Ricardian theory of international trade challenges the mercantilism 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.
Frequently Asked Questions
{mb_by_number_of_quotes} Quotes by David Ricardo
- 1.
In comparing therefore the value of the same commodity, at different periods of time, the consideration of the comparative skill and intensity of labour, required for that particular commodity, needs scarcely to be attended to, as it operates equally at both periods.
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- 2.
Profits might also increase, because improvements might take place in agriculture, or in the implements of husbandry, which would augment the produce with the same cost of production.
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- 3.
But a rise in the wages of labour would not equally affect commodities produced with machinery quickly consumed, and commodities produced with machinery slowly consumed.
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- 4.
By far the greatest part of those goods which are the objects of desire, are procured by labour; and they may be multiplied, not in one country alone, but in many, almost without any assignable limit, if we are disposed to bestow the labour necessary to obtain them.
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- 5.
If the quantity of labour realized in commodities, regulate their exchangeable value, every increase of the quantity of labour must augment the value of that commodity on which it is exercised, as every diminution must lower it.
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- 6.
Gold and silver are no doubt subject to fluctuations, from the discovery of new and more abundant mines; but such discoveries are rare, and their effects, though powerful, are limited to periods of comparatively short duration.
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- 7.
If a commodity were in no way useful, – in other words, if it could in no way contribute to our gratification, – it would be destitute of exchangeable value, however scarce it might be, or whatever quantity of labour might be necessary to procure it.
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- 8.
If we were left to ourselves, unfettered by legislative enactments, we should gradually withdraw our capital from the cultivation of such lands, and import the produce which is at present raised upon them.
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- 9.
The facility of obtaining food is beneficial in two ways to the owners of capital, it at the same time raises profits and increases the amount of consumable commodities.
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- 10.
In the same manner if any nation wasted part of its wealth, or lost part of its trade, it could not retain the same quantity of circulating medium which it before possessed.
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- 11.
A rise in wages, from an alteration in the value of money, produces a general effect on price, and for that reason it produces no real effect whatever on profits.
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- 12.
Again two manufacturers may employ the same amount of fixed, and the same amount of circulating capital; but the durability of their fixed capitals may be very unequal.
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- 13.
The exchangeable value of all commodities, rises as the difficulties of their production increase.
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- 14.
If then the prosperity of the commercial classes, will most certainly lead to accumulation of capital, and the encouragement of productive industry; these can by no means be so surely obtained as by a fall in the price of corn.
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- 15.
The rise or fall of wages is common to all states of society, whether it be the stationary, the advancing, or the retrograde state.
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- 16.
There can be no rise in the value of labour without a fall of profits.
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- 17.
A rise of wages from this cause will, indeed, be invariably accompanied by a rise in the price of commodities; but in such cases, it will be found that labour and all commodities have not varied in regard to each other, and that the variation has been confined to money.
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- 18.
Gold, on the contrary, though of little use compared with air or water, will exchange for a great quantity of other goods.
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- 19.
If the demand for home commodities should be diminished, because of the fall of rent on the part of the landlords, it will be increased in a far greater degree by the increased opulence of the commercial classes.
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- 20.
It is not by the absolute quantity of produce obtained by either class, that we can correctly judge of the rate of profit, rent, and wages, but by the quantity of labour required to obtain that produce.
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- 21.
After all the fertile land in the immediate neighbourhood of the first settlers were cultivated, if capital and population increased, more food would be required, and it could only be procured from land not so advantageously situated.
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- 22.
Gold and silver, like other commodities, have an intrinsic value, which is not arbitrary, but is dependent on their scarcity, the quantity of labour bestowed in procuring them, and the value of the capital employed in the mines which produce them.
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- 23.
During the period of capital moving from one employment to another, the profits on that to which capital is flowing will be relatively high, but will continue so no longer than till the requisite capital is obtained.
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- 24.
The proportions, too, in which the capital that is to support labour, and the capital that is invested in tools, machinery and buildings, may be variously combined.
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- 25.
Whenever, then, the usual and ordinary rate of the profits of agricultural stock, and all the outgoings belonging to the cultivation of land, are together equal to the value of the whole produce, there can be no rent.
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- 26.
In stating the principles which regulate exchangeable value and price, we should carefully distinguish between those variations which belong to the commodity itself, and those which are occasioned by a variation in the medium in which value is estimated, or price expressed.
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- 27.
As the revenue of the farmer is realized in raw produce, or in the value of raw produce, he is interested, as well as the landlord, in its high exchangeable value, but a low price of produce may be compensated to him by a great additional quantity.
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