David Ricardo was an influential British classical economist in the late 18th and early 19th centuries. His best known work is Principles of Political Economy and Taxation, in which he outlined several of his most influential theories, including comparative advantage and the Iron Law of Wages.
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Ricardo is perhaps best known for formulating the concept of comparative advantage which he outlined in his most important work, Principles of Political Economy and Taxation. In that treatise, he famously uses the example of English cloth and Portuguese wine to demonstrate that because of opportunity cost, nations should focus on producing goods which they produce more efficiently than other goods.
IRON LAW OF WAGES
Ricardo proposed that, over time, wages would tend towards the minimum wage necessary to live. In formulating this theory, Ricardo famously criticized the work of Thomas Malthus and his theory of rent. Malthus is best known for his Essay on the Principle of Population.
Economist Robert Barro coined the term Ricardian Equivalence to describe Ricardo’s theory that demand stays constant regardless of whether the government finances spending through debt or taxes.
“THE HIGH PRICE OF BULLION”
Ricardo called for the use of specie (metal currency) in his treatise, The High Price of Bullion in which he argued that bank notes (paper currency) are inherently susceptible to depreciation.
When he served in Parliament, David Ricardo was an outspoken critic of the Corn Laws, a series of protective tariffs on agricultural imports. He wrote a well-known treatise outlining his position that the Corn Laws would drive wealth to landlords rather than industrialists, thus slowing Britain’s transition to an industrial power.
Quizbowl is about learning, not rote memorization, so we encourage you to use this as a springboard for further reading rather than as an endpoint. Here are a few things to check out:
* You can read a good explanation of comparative advantage here:
* This website has a nice outline of Ricardo’s theories written in relatively easy to understand language.
* The History of Liberalism podcast did an interesting episode on David Ricardo, Thomas Malthus and Adam Smith. Listen here:
* Finally, this video is an excellent explanation of comparative advantage:
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