David Ricardo
David Ricardo (April 19,1772- September 11, 1823), a British economist, is often credited with systematizing economics, and was one of the most influential of the classical economists. He was also a successful businessman, financier and speculator, and amassed a considerable fortune.
Personal life
Born in London, Ricardo was the third of seventeen children in a Sephardic Jewish family that emigrated from The Netherlands to England just prior to his birth. At age 14 Ricardo's joined his father at the London Stock Exchange.
Ricardo rejected the orthodox Jewish beliefs of his family and eloped with a Quaker, Priscilla Anne Wilkinson, when he was 21. His father was so unhappy with this that he abandoned Ricardo and never spoke to him again. Around the same time Ricardo became a Unitarian.
Ricardo's work with the stock exchange made him quite wealthy, which allowed him to retire from business in 1814 at the age of 42. He then purchased and moved to Gatcombe Park, an estate in Gloucestershire.
In 1819, Ricardo purchased a seat in the British parliament as a representative of Portarlington, a borough of Ireland. He held the post until the year of his death. As an MP, Ricardo advocated free trade and the repeal of the Corn Laws.
He died at Gatcombe Park at 51 years of age.
Ricardo was a close friend of James Mill, who encouraged him in his political ambitions and writings about economics. Other notable friends included Thomas Malthus, whose ideas on population growth Ricardo accepted, and Jeremy Bentham.
Ideas
Ricardo became interested in economics after reading Adam Smith's The Wealth of Nations in 1799.
His publications included:
- The High Price of Bullion, a Proof of the Depreciation of Bank Notes (1810), which advocated the adoption of a metallic currency
- Essay on the Influence of a Low Price of Corn on the Profits of Stock (1815), which argued that repealing the Corn Laws would distribute more wealth to the productive members of society
- Principles of Political Economy and Taxation (1817), an analysis that concluded that land rent grows as population increases. It also proposed the theory of comparative advantage, which showed that all nations could benefit from free trade, even if a nation was less efficient at producing all kinds of goods than its trading partners.
Other ideas associated with Ricardo:
- Ricardian equivalence, an argument suggesting that in some circumstances the choice of a government to pay for spending using either taxes or deficit spending might have no effect on the economy.
- The iron law of wages, which asserted that real income of workers would remain near the subsistence level, despite any attempts to raise wages.
See also
