OLL’s April Birthday: David Ricardo (April 18, 1772 – September 11, 1823)

April’s OLL Birthday Essay is in honor of the English stockbroker, political economist, and parliamentarian David Ricardo.  During his relatively short life, Ricardo made contributions to the field of economics that were, and remain, tremendously influential.  Along with Adam Smith, Ricardo was one of the founders of Classical Economics and, indeed, of the field in general.

Ricardo was born in Bury Street, in the City of London, the eldest of three surviving children (out of a total of 17), into a wealthy Sephardic Jewish family.  His father’s (Abraham Israel Ricardo, 1733-1812) family were recent immigrants from the Netherlands, whereas his mother’s (Abigail, 1753-1801) family, the Delvalles, had lived in England for generations.  Abraham Ricardo was a successful stockbroker, and his son David worked along side him from around his fourteenth birthday.  When he was 21 he fell in love with a Quaker named Priscilla Anne Wilkinson (1768-1849).  They married in December 1793 and David converted to Unitarianism.  The entire episode led immediately to a permanent estrangement from his family:  His father disowned him and cut him out of the family business and his mother never spoke to him again.  Despite this rather unpropitious start, the couple seem to have had a caring and stable marriage.  Together they had three sons (all of whom pursued political careers) and five daughters.  

Faced with the necessity of supporting himself and his wife, Ricardo set himself up (with a little help from his friends) as a stockbroker and went on to make a fortune financing government borrowing.  By 1814 he was wealthy enough to buy an estate and grand country house in Gloucestershire, Gatcombe Park (since 1976 the country home of Princess Anne), where he subsequently lived with his family.  His great wealth enabled him largely to retire from his business ventures and to spend more time pursuing his intellectual interests, particularly minerology and geology (he was an early member of the Geological Society of London), as well as chemistry and mathematics.  But his intellectual pursuits were increasingly dominated by the embryonic field of political economy.  While on a trip to Bath in 1799 he happened to get a copy of Adam Smith’s Wealth of Nations which so impressed him that he devoted the rest of his life to the study of economics, aided by his friendships with James Mill and Thomas Malthus.  Years later, in 1821, the three (along with Robert Torrens) founded the Political Economy Club, the world’s oldest association for the study of economics.  Between 1809 and 1817 he published several short works and pamphlets, many of which treated monetary subjects and the problem of inflation.  In 1815 he published an attack on the protectionist Corn Laws, Essay on the Influence of a Low Price of Corn on the Profits of Stock, which was an example of his growing interest in free trade, and a subject to which he would later return as a member of parliament. In 1817, after years of work (and considerable encouragement from James Mill), he published what is probably his best known and most important work, On the Principles of Political Economy and Taxation. Among the many topics treated in the book, perhaps the most enduring and influential for future economists was the concept of comparative advantage (the term itself was coined later by John Stuart Mill), which became a fundamental argument for free trade. Ricardo also refined and clarified Smith’s Labor Theory of Value, which later greatly influenced the economic and sociological theories of Karl Marx, among others, while his work on the concept of rent was subsequently foundational in the writings of Henry George.

By this point in his life Ricardo was extremely wealthy and had become a well-known and respected economist.  In 1819, again with the active encouragement of James Mill, he entered parliament.  While he never joined any party, his work there was almost always on the side of reformers directed against the Tory-led government.  Besides advocating the abolition of slavery, he was particularly concerned with reforms to the criminal justice system (e.g., reducing the number of crimes subject to capital punishment). But he was most famous in parliament as an indefatigable advocate of the repeal of protectionist trade policies, especially the Corn Laws.  His tremendous stature as a famous economist guaranteed that his fellow members of parliament would give him a hearing, though the Corn Laws were not repealed until 1846.  

Ricardo’s productive life as an economist and parliamentarian ended abruptly.  An ear infection quickly spread through his body and led to acute septicemia.  He died at his home on September 11, 1823 and was buried in an elaborate tomb in the cemetery of St. Nicholas’ Church, Hardenhuish, Wiltshire. His fortune was divided between his children and his widow, who also received an annuity.  He also left money to his old friends James Mill and Thomas Malthus.

David Ricardo’s importance to the history of economics can scarcely be overstated.  His work basically founded what is now called Classical Economics and introduced questions and theories that have animated the broader field of economics ever since.  While many of his ideas, especially the Labor Theory of Value, have been superseded, modified, or abandoned, his work remains foundational and fundamental to the discipline of economics.