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David Ricardo

Life and Works

David Ricardo was born in London in 1772, the son of a well-to-do stockbroker and a Sephardic Jew. Following the family traditions, he studied in Amsterdam, an important financial centre that, in fact, the Ricardo family hailed from. Back in London at the age of fourteen, David began work in the Stock Exchange with his father. Soon, however, he was to become the protagonist of a romantic story: falling in love with a young Quaker girl, he married her against his family’s will and was disowned. Thus compelled to launch out on his own, thanks to his ability he soon became an established member of the business community.

His work at the Stock Exchange spurred him to systematic consideration of the economic vicissitudes of the country. While on holiday, in 1799, Ricardo happened to read Smith’s Wealth of Nations. He was not a scholarly type, but he had a logical mind and sharp intelligence. His analytic penchant thus germinated around three elements: the immediate economic events of his time, debate revolving around them and Smith’s book.

His first economic writings entered upon the field of the monetary controversies of the time. However, his main contributions to political economy came after his departure from the Stock Exchange in 1815, when he was only forty-three years old but already a wealthy person, thanks in particular to successful speculations on the placing of public debt. Ricardo moved to the countryside, at Gatcomb, and there led the tranquil life of a rich gentleman. He also got involved in politics and in 1819 became a Member of Parliament representing Portarlington, a borough in Ireland with only twelve electors who, as was usual at the time, sold their vote to the highest bidder. He joined in the economic debates of the period but more through correspondence with friends and parliamentary speeches than with publications. Among the latter, his

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Essay on the Influence of a Low Price of Corn on the Profits of Stock, published in 1815, met with positive response. His main work is titled On the Principles of Political Economy, and Taxation, published in 1817.1

In his publishing and parliamentary activity Ricardo dealt with monetary, fiscal and public debt issues, proposing recourse to wealth taxes in order to pay back over a few years’ time the public debt that had piled up during the Napoleonic wars. In 1823 he proposed that the issue of bank notes be entrusted to a National Bank and that the Bank of England be limited to the activity of a commercial bank. Ricardo died in 1823. He left a large estate to his wife and his surviving children, with bequests to his friends Malthus and James Mill.

Although he was acclaimed as the leading figure, in the years immediately following his death his scientific heritage was already gradually being dissipated, with increasing distortion of his original thought. With the rise of the marginalist approach, after 1870, the idea gained ground of Ricardo as a genius but not worth reading; indeed, it was even suggested that with his extraordinary intelligence he had set political economy on a wrong track. It was only with the ten-volume edition of his works and correspondence edited by Sraffa (Ricardo 1951-55) that Ricardo and his scientific contribution were brought back to the attention of economists.

 
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