DAVID RICARDO

«The exchangeable value of all commodities rises as the

difficulties of their production increase»
WHO IS DAVID RICARDO?

• A British classical economist (Thomas Malthus, Adam

Smith, James Mill).

• He was born in 1772 from a Sephardic Jewish family.

• He soon started to work with his father, a successful

stockbroker.

• He became an unitarian at the age of 21 and was disowned

by his father.
• He kept working in the stock exchange

success and great wealth

interest in economics

• In 1818 Ricardo joined the Parliament.

• He was not a frequent speaker, but he had a great reputation.

• He died in 1823 from a middle ear infection. septicaemia

BRITISH ECONOMY BETWEEN ‘700 AND ‘800

• Industrial Revolution. The most technology-advanced country

in Europe.
• Huge public debt because of the wars.

• Many industry workers with a stable wage.

Steam engine, industries, iron and
• High urbanization. coal production.

• Population growth and decrease of the mortality rate.

• Development in the field of medicine.

HIS INSPIRATION AND IDEAS

• His interest in economics was born in 1799 after reading Adam Smith’s The
Wealth of Nations.

• First economic article at age 37.

a link between the
• The High Price of Bullion, a Proof of the Depreciation of Bank Notes (1810) volume of bank notes
and the level of prices
• He was an abolitionist
slavery is a national stain
• Essay on the Influence of a Low Price of Corn on the profits of stock (1815)
against protectionism for
national economies

Corn Laws restricted

imports of wheat
 Industry
specialisation
Comparative Advantage positive
results
Free trade rent of a land site

Law of Rent
economic adavantage in its
most productive use
• Principles of Political Economy and Taxation (1817) is his
most famous work.
profits vary
Theory of Profit inversely with
wages

Value of a commodity Quantity of labour for

Labor Theory of Value its production

Compensation paid for

NO that labour
CRITICISM
PERSONAL RESPONSE

• For advantage: Even if a country  productivity is weak, there is still a

trade between them and have benefit with each other.

• For disadvantage: It has limitation.

ECONOMISTS'
THOUGHTS
• Utsa Patnaik claims that Ricardian theory of international trade
contains a logical fallacy.

• Ha-Joon Chang : Ricardo's theory is absolutely right within its

narrow confines, but fails when a country wants to acquire more
advanced tec.
BIBLIOGRAPHY
• https://en.wikipedia.org/wiki/David_Ricardo

• http://www.investopedia.com/terms/d/david-ricardo.asp

• http://policonomics.com/david-ricardo/

• Joseph J. Spengler, David Ricardo, Encyclopaedia Britannica,

https://www.britannica.com/biography/David-Ricardo

• Piero Sraffa, David Ricardo, Cambridge, 1951-1973,

http://www.econlib.org/library/Enc/bios/Ricardo.html