View source for David Ricardo

{{Short description|British economist and politician (1772–1823)}}
{{other people}}
{{Use dmy dates|date=April 2022}}
{{Infobox officeholder
| honorific-prefix    = [[The Right Honourable]]
| name                = David Ricardo
| image               = Portrait of David Ricardo by Thomas Phillips.jpg
| caption             = Portrait by [[Thomas Phillips]], {{circa}} 1821
| office              = [[Member of Parliament (United Kingdom)|Member of Parliament]] <br />for [[Portarlington (UK Parliament constituency)|Portarlington]]
| term_start          = 20 February 1819
| term_end            = 11 September 1823
| predecessor         = [[Richard Sharp (politician)|Richard Sharp]]
| successor           = [[James Farquhar (MP)|James Farquhar]]
| birth_date          = {{Birth date|df=y|1772|4|18}}
| birth_place         = London, England
| death_date          = {{Death date and age|df=y|1823|9|11|1772|4|18}}
| death_place         = [[Gatcombe Park]], Gloucestershire, England
| nationality         = British
| party               = [[Whigs (British political party)|Whig]]
| children            = 8, including [[Osman Ricardo|Osman]] and [[David Ricardo (the younger)|David the Younger]]
| profession          = {{hlist|Economist|politician}}
| module              = {{Infobox economist|embed=yes
| school_tradition = [[Classical economics]]
| field            =
| influences       =[[Jeremy Bentham|Bentham]]{{·}}
 [[Ibn Khaldun]]{{·}} [[Adam Smith|Smith]]
| contributions    = [[Ricardian equivalence]], [[labour theory of value]], [[comparative advantage]], [[Diminishing returns|law of diminishing returns]], [[Ricardian economics]] {{small|''('''later interpretations:''' [[Ricardian socialism]] and [[Neo-Ricardian economics]])''}}, [[Economic rent]]<ref>Miller, Roger LeRoy. ''Economics Today''. Fifteenth Edition. Boston, MA: Pearson Education. p. 559</ref>}}
}}
{{Capitalism sidebar}}{{Economics sidebar}}{{Liberalism UK|People}}{{Liberalism sidebar}}

'''David Ricardo''' (18 April 1772 – 11 September 1823) was a British economist and politician of Portuguese Jewish descent. He is recognized as one of the most influential [[Classical economics|classical economists]], alongside figures such as [[Thomas Robert Malthus|Thomas Malthus]], [[Adam Smith]] and [[James Mill]].<ref>Sowell, Thomas (2006). ''On classical economics''. New Haven, CT: [[Yale University Press]].</ref><ref>{{Cite web | url=https://www.policonomics.com/david-ricardo/ | title=David Ricardo &#124; Policonomics| date=30 January 2012}}</ref>

Ricardo was born in London as the third surviving child of a successful stockbroker and his wife. He came from a [[Sephardic Jews|Sephardic Jewish]] family of Portuguese origin. At 21, he eloped with a [[Quaker]] and converted to [[Unitarianism]], causing estrangement from his family. He made his fortune financing government borrowing and later retired to an estate in [[Gloucestershire]]. Ricardo served as [[High Sheriff of Gloucestershire]] and bought a seat in Parliament as an earnest reformer. He was friends with prominent figures like [[James Mill]], [[Jeremy Bentham]], and [[Thomas Robert Malthus|Thomas Malthus]], engaging in debates over various topics. Ricardo was also a member of [[The Geological Society]], and his youngest sister was an author.

As MP for [[Portarlington (UK Parliament constituency)|Portarlington]], Ricardo advocated for liberal political movements and reforms, including [[free trade]], parliamentary reform, and criminal law reform. He believed free trade increased the well-being of people by making goods more affordable. Ricardo notably opposed the [[Corn Laws]], which he saw as barriers to economic growth. His friend John Louis Mallett described Ricardo's conviction in his beliefs, though he expressed doubts about Ricardo's disregard for experience and practice. Ricardo died at 51 from an ear infection that led to [[septicaemia]] (sepsis). He left behind a considerable fortune and a lasting legacy, with his free trade views eventually becoming public policy in Britain.

Ricardo wrote his first economics article at age 37, advocating for a reduction in the note-issuing of the [[Bank of England]]. He was also an [[Abolitionism|abolitionist]] and believed in the autonomy of a [[central bank]] as the issuer of money. Ricardo worked on fixing issues in Adam Smith's [[Labor theory of value#Adam Smith and David Ricardo|labour theory of value]], stating that the value of a commodity depends on the labour necessary for its production. He contributed to the development of theories of rent, wages, and profits, defining rent as the difference between the produce obtained by employing equal quantities of capital and labour. Ricardo's Theory of Profit posited that as real wages increase, real profits decrease due to the revenue split between profits and wages.

Ricardian theory of international trade challenges the [[mercantilist]] concept of accumulating gold or silver by promoting industry specialization and free trade. Ricardo introduced the concept of "comparative advantage", suggesting that nations should concentrate resources only in industries where they have the greatest efficiency of production relative to their own alternative uses of resources. He argued that international trade is always beneficial, even if one country is more competitive in every area than its trading counterpart. Ricardo opposed [[protectionism]] for national economies and was concerned about the short-term impact of technological change on labour.

==Personal life==
Born in London, England, Ricardo was the third surviving of the 17 children of successful stockbroker Abraham Israel Ricardo (1733?–1812) and Abigail (1753–1801), daughter of Abraham Delvalle (also "del Valle"), of a respectable [[Sephardic Jews|Sephardic Jewish]] family that had been settled in England for three generations as "small but prosperous" tobacco and snuff merchants, and had obtained British citizenship. Abigail's sister, Rebecca, was wife of the engraver [[Wilson Lowry]], and mother of the engraver [[Joseph Wilson Lowry]] and the geologist, mineralogist, and author [[Delvalle Lowry]].<ref>David Ricardo, D. Weatherall, Springer Netherlands, 2012, p. 6</ref><ref>Anglo-Jewish Portraits – A Biographical Catalogue of Engraved Anglo-Jewish and Colonial Portraits from the Earliest Times to the Accession of Queen Victoria, Alfred Rubens, Jewish Museum, London, 1935, p. 69</ref><ref name="Heertje">{{cite journal|last=Heertje|first=Arnold|year=2004|title=The Dutch and Portuguese-Jewish background of David Ricardo|journal=European Journal of the History of Economic Thought|volume=11|issue=2|pages=281–294|doi=10.1080/0967256042000209288|s2cid=154424757}}</ref><ref name=":1">{{Cite ODNB|title=The Oxford Dictionary of National Biography|date=2 September 2004|url=http://www.oxforddnb.com/view/article/23471|pages=ref:odnb/23471|editor-last=Matthew|editor-first=H. C. G.|doi=10.1093/ref:odnb/23471|access-date=14 December 2019|editor2-last=Harrison|editor2-first=B.}}</ref> The Ricardo family were Sephardic Jews of [[Portuguese people|Portuguese]] origin who had recently relocated from the [[Dutch Republic]].<ref name="Heertje"/> Ricardo began working with his father at the age of 14. At the age of 21, Ricardo eloped with a [[Quakers|Quaker]], Priscilla Anne Wilkinson, and against his father's wishes, converted to [[Unitarianism]].<ref>Francisco Solano Constancio, Paul Henri Alcide Fonteyraud. 1847. ''[https://fr.wikisource.org/wiki/%C5%92uvres_compl%C3%A8tes_de_David_Ricardo/Notice Œuvres complètes de David Ricardo]'', Guillaumin, (pp. v–xlviii): ''A part sa conversion au Christianisme et son mariage avec une femme qu'il eut l'audace grande d'aimer malgré les ordres de son père''</ref> This religious difference resulted in estrangement from his family, and he was led to adopt a position of independence.<ref>Ricardo, David. 1919. ''Principles of Political Economy and Taxation''. G. Bell, p. lix: "by reason of a religious difference with his father, to adopt a position of independence at a time when he should have been undergoing that academic training"</ref> His father disowned him and his mother apparently never spoke to him again.<ref name=sraffa>{{Citation |author=Sraffa, Piero |author2=David Ricardo |title=The Works and Correspondence of David Ricardo: Volume 10, Biographical Miscellany |publisher=Cambridge University Press |location=Cambridge, UK |year=1955 |page=434 |isbn=0521060753}}</ref>

Following this estrangement he went into business for himself with the support of Lubbocks and Forster, an eminent banking house. He made the bulk of his fortune by profitably financing Government borrowing. A popular story states that he made his fortune as a result of speculation on the outcome of the [[Battle of Waterloo]]: in Ricardo's obituary, published on 14 September 1823,''[[The Sunday Times]]'' reported that during the battle Ricardo "netted upwards of a million sterling", a huge sum at the time, and this was later popularised by the economist [[Paul Samuelson]]. In reality, Ricardo was already very rich, and in June 1815, sold his latest government stock before the result of the battle was known in London, missing half of the rise.<ref>Wilfried Parys, [https://www.eshet-conference.net/lille/file/edl/?file=dVg5YURiRmc1TTZKOHhTamhZYmVwY0R4b3d1a0xuTkdTS0F5VlNoc2JaamRmTk5tL0hyT3h1bEJMeE5ha0g5WmNKbEhNRUV2UWhYbm9tL0ZEbVVPL09CZ2Y5eE1Ic092S3NFY01FSjVCc2ovSjNHOEQxL3pHeU9ONGZXME1VZ2p6U2ZXV0pyeEJOaWFXbzVTbjNIM3hoU1dzWG9GWitlUEh3UVNURXN4YTc3Y0tTdzVaaExVVTdRNU8vOXVRQkxqQW04Rk1pb3NDQXh3c1p0YzN4Wm91Zz09 "Samuelsonian legends about Ricardo's finances lack historical evidence"]</ref>

He subsequently purchased [[Gatcombe Park]], an estate in [[Gloucestershire]], and retired to the country. He was appointed [[High Sheriff of Gloucestershire]] for 1818–19.<ref>{{London Gazette|issue=17326|page=188|date=24 January 1818}}</ref> In August 1818 he bought Lord Portarlington's seat in Parliament for £4,000, as part of the terms of a loan of £25,000. His record in Parliament was that of an earnest reformer. He held the seat until his death five years later.<ref>{{Cite web|title=David Ricardo {{!}} Biography, Theory, Comparative Advantage, & Works|url=https://www.britannica.com/biography/David-Ricardo|access-date=7 July 2021|website=Encyclopædia Britannica|language=en}}</ref>

Ricardo was a close friend of [[James Mill]]. Other notable friends included [[Jeremy Bentham]] and [[Thomas Malthus]], with whom Ricardo had a considerable debate (in correspondence) over such things as the role of landowners in a society. He also was a member of Malthus' [[Political Economy Club]], and a member of the [[King of Clubs (Whig club)|King of Clubs]]. He was one of the original members of [[The Geological Society]].<ref name=sraffa /> His youngest sister was author [[George Richardson Porter#Family|Sarah Ricardo-Porter]] (e.g., ''Conversations in Arithmetic'').

==Parliamentary record==

As MP for [[Portarlington (UK Parliament constituency)|Portarlington]], Ricardo voted with the opposition in support of liberal political movements in [[Naples]] and [[Sicily]], and for inquiry into the administration of justice in [[Tobago]]. He divided for (voted for) repeal of the [[Six Acts|Blasphemous and Seditious Libels Act]]; then for inquiry into the [[Peterloo Massacre]]; and, in 1821, for abolition of the [[death penalty]] for [[forgery]].

He supported [[free trade]]. In 1821 he voted against renewal of the sugar duties, and objected to the higher duty on ''East'' Indian as opposed to ''West'' Indian produce. He opposed the timber duties. He voted silently for parliamentary reform and in 1822 spoke in its favour at the Westminster anniversary reform dinner; and again voted for criminal law reform.

Ricardo believed that increasing imports and free trade boosted the well-being of mankind by increasing the amount of goods cheaply available for subsistence and consumption. He was said to have "possessed an extraordinary quickness in perceiving in the turns of the market any accidental difference which might arise between the relative price of different stocks".<ref>{{cite news |last1=Zweig |first1=Jason |title=Economist David Ricardo |url=https://www.wsj.com/articles/BL-MBB-60411 |work=The Wall Street Journal |date=26 May 2017 |access-date=16 April 2021}}</ref> He grew his wealth dealing in securities during the Revolutionary and [[Napoleonic Wars]].

As the Napoleonic Wars waged on, Ricardo developed a disdain for the [[Corn Laws]] imposed by the British to encourage exports. Notably, government intervention in the [[grain trade]] can be traced as far back as the 1400s; and thereafter trade was controlled, regulated, and taxed. Meanwhile, England developed a capitalist economy involving workers and landlords generating and consuming incomes and capital accumulations that depended entirely on capitalists' profits,<ref>{{cite book |last1=King |first1=John |title=David Ricardo |date=2013 |publisher=Palgrave Macmillan |location=UK |isbn=978-0230289963 |page=88}}</ref> and these key economic elements were under perpetual pressure during the eighteenth and early nineteenth centuries.

Political reform was needed as agricultural output was struggling to keep pace with population growth. The Corn Laws imposed barriers to imports that increased subsistence/consumption costs and triggered demand for higher wages. Higher wages reduced profits for agricultural producers, and had the immediate effects of reducing capital investments and slowing the growth of a nation's economy. Rising rents, attributed by Ricardo to the Corn Laws, came at the expense of the economic profits of nations. For David Ricardo, free trade was ever the answer; he envisioned Britain as importing agriculture products in exchange for exporting manufactured goods.<ref>{{cite book |last1=Davis |first1=Timothy |title=Ricardo's Macroeconomics |date=2005 |publisher=Cambridge University Press |location=New York City |isbn=0521844746 |page=29}}</ref> Eventually, after his death, the interventionist laws were repealed, and his free trade views became public policy in Britain.<ref>{{cite journal |last1=Formaini |first1=Robert |title=David Ricardo – Theory of Free International Trade |journal=Economic Insights |date=n.d. |volume=9 |issue=2 |url=https://www.dallasfed.org/~/media/documents/research/ei/ei0402.pdf |archive-url=https://web.archive.org/web/20161224112140/https://www.dallasfed.org/~/media/documents/research/ei/ei0402.pdf |archive-date=2016-12-24 |url-status=live}}</ref>

Of David Ricardo, his friend John Louis Mallett commented: " ... he meets you upon every subject that he has studied with a mind made up, and opinions in the nature of mathematical truths. He spoke of parliamentary reform and ballot as a man who would bring such things about, and destroy the existing system tomorrow, if it were in his power, and without the slightest doubt on the result ... It is this very quality of the man's mind, his entire disregard of experience and practice, which makes me doubtful of his opinions on political economy."

==Death and legacy==
Ten years after retiring and four years after entering Parliament, Ricardo died at 51 from an infection of the middle ear that spread into his brain and induced [[septicaemia]].

He and his wife Priscilla had eight children together including [[Osman Ricardo]] (1795–1881, MP for [[Worcester (UK Parliament constituency)|Worcester]] 1847–1865), [[David Ricardo (the younger)|David Ricardo]] (1803–1864, MP for [[Stroud (UK Parliament constituency)|Stroud]] 1832–1833) and Mortimer Ricardo, who served as an officer in the [[Life Guards (British Army)|Life Guards]] and was a [[deputy lieutenant]] for [[Oxfordshire]].<ref>{{cite web |url=http://www.histparl.ac.uk/volume/1820-1832/member/ricardo-david-1772-1823 |title=Ricardo, David (1772–1823), of Gatcombe Park, Minchinhampton, Glos. and 56 Upper Brook Street, Grosvenor Square, Mdx. |publisher=History of Parliament Online |access-date=18 September 2013 |archive-date=28 August 2019 |archive-url=https://web.archive.org/web/20190828221832/http://www.histparl.ac.uk/volume/1820-1832/member/ricardo-david-1772-1823 |url-status=dead }}</ref>

Ricardo is buried in an ornate grave in the churchyard of [[Nicholas of Myra|Saint Nicholas]] in Hardenhuish, now a suburb of [[Chippenham]], Wiltshire. At the time of his death, his assets were estimated at £675,000–£775,000.<ref name=":1" />

==Ideas==
Ricardo wrote his first economics article at 37, firstly in ''[[The Morning Chronicle]]'' advocating reduction in the note-issuing of the [[Bank of England]] and then publishing ''The High Price of Bullion, a Proof of the Depreciation of Bank Notes'' in 1810.<ref>{{cite book|last=Hayek|first=Friedrich|title=The Trend of Economic Thinking|contribution=The Restriction Period, 1797–1821, and the Bullion Debate|year=1991|url= https://archive.org/details/TheTrendOfEconomicThinking|isbn=978-0865977426|pages=[https://archive.org/details/TheTrendOfEconomicThinking/page/n209 199]–200|publisher=Liberty Fund }}</ref><ref>{{cite book|last=Sraffa|first=Piero|title=The Works and Correspondence of David Richardo|year=1973|url= https://oll-resources.s3.us-east-2.amazonaws.com/oll3/store/titles/204/0687-03_LF.pdf }}</ref>

He was also an [[abolitionism|abolitionist]], speaking at a meeting of the Court of the [[East India Company]] in March 1823, where he said he regarded [[slavery]] as a stain on the character of the nation.<ref>{{cite book |last1=King |first1=John |title=David Ricardo |date=2013 |publisher=Palgrave Macmillan |page=48}}</ref>

===Banking===

[[Adam Smith]] argued that [[Commercial banking|free commercial banking]], such as the banking system in Scotland which had no [[central bank]] when ''[[Wealth of Nations]]'' was written in 1776, was favourable to economic growth. Writing just a few decades later, Ricardo argued for a central bank, a cause that was taken up by his students, including [[John Stuart Mill]], who was known to favour the ''[[laissez-faire]]'' policies in every place but banking.

Ricardo wrote the ''Plan for the Establishment of a National Bank'' (published posthumously in 1824), which argued for the autonomy of the central bank as the issuer of money.<ref name=bindseil2019>{{cite book |title=The Oxford Handbook of the Economics of Central Banking |year=2019|url=https://books.google.com/books?id=jtmUDwAAQBAJ |page=59|publisher = Oxford University Press|isbn = 978-0190626198}}</ref>

Ricardo proposed that a ratio of gold and Treasury bills, and a fixed claim (asset) against the government, would secure the central bank's liquidity:<ref name=binsdseil2019>{{cite book |last=Bindseil |first=Ulrich |title=Central Banking Before 1800: A Rehabilitation |publisher=Oxford University Press |year=2019 |isbn=978-0198849995 |url=https://books.google.com/books?id=fNrBDwAAQBAJ}}</ref>

<blockquote>The public, or the Government on behalf of the public, is indebted to the Bank in a sum of money larger than the whole amount of Bank notes in circulation; for the Government not only owes the Bank fifteen million, its original capital, which is lent at 3 per cent. interest, but also many more millions which are advanced on Exchequer bills, on half-pay and pension annuities, and on other securities. It is evident, therefore, that if the Government itself were to be the sole issuer of paper money instead of borrowing it of the Bank, the only difference would be with respect to the interest: the Bank would no longer receive interest and the Government would no longer pay it; but all other classes in the community would be exactly in the same position in which they now stand.</blockquote>

Ricardo was a man of many trades, economically and financially speaking. Ricardo was able to recognize and identify the problem presented through banking within regulations and debauched standards of approval at certain times. Ricardo knew that banks in rural areas as well as the Bank of England had increased note lending and overall lending in 1810. Through this, Ricardo proved subsequent changes in price level through the market was also affected and thus new regulations needed to be made available. Furthermore, Ricardo was able to understand and distinguish the socioeconomic makeup that created and established parameters around different classes within the economy. Ricardo advocated for the productive powers of labour to be held in high concern as the most influential of devices that played a role in the progression of the American Economy along with others. In addition, Ricardo made notable advancements in the concept build involving reactions in the open market when considering banking altercations, stock investments, or other considerable impacting events. Ricardo wanted to establish a firm ground between the bank and the control over monetary policy because there was power within the banking system that Ricardo believed needed to be considered carefully. In 1816, Ricardo said "In the present state of the law, they have the power, without any control whatever, of increasing or reducing the circulation in any degree they may think proper: a power which should neither be entrusted to the State itself, nor to anybody in it; as there can be no security for the uniformity in the value of the currency, when its augmentation or diminution depends solely on the will of the issuers." Ricardo felt the circulation of money and the decision behind how much is available at any time should not be entrusted to either the State, or any individual. Ricardo argued for the most even distribution possible with the highest control readily available.

===Value theory===
David Ricardo worked to fix the issues he felt were most concerning with [[Adam Smith]]'s Labour Theory of Value.<ref>{{Cite web |title=Adam Smith on the Labor Theory of Value {{!}} Adam Smith Works |url=https://www.adamsmithworks.org/documents/steven-horwitz-adam-smith-on-the-labor-theory-of-value |access-date=2024-05-13 |website=www.adamsmithworks.org |language=en}}</ref> Both men worked with the assumption that land, labour, and capital were the three basic factors of production. However, Smith narrowed in on labour as the determinant of value. Ricardo believes that with production having three factors it is impossible for only one of them to determine value on its own.<ref>{{Cite book|last=Sandmo|first=Agnar|title=Economics Evolving A History of Economic Thought|publisher=Princeton University Press|year=2011|isbn=978-0691140636|pages=74–76}}</ref> Ricardo illustrates his point by adapting Smith's deer-beaver analogy<ref>{{Cite web |title=Adam Smith on the Labor Theory of Value {{!}} Adam Smith Works |url=https://www.adamsmithworks.org/documents/chapter-vi-of-the-component-parts-of-the-price-of-commodities |access-date=2024-05-13 |website=www.adamsmithworks.org |language=en}}</ref> to show that even when labour is the only factor of production the hardship and tools of the labour will drive a wedge in the relative value of the good. Due to his criticisms of the Labour Theory of Value [[George Stigler]] called his theory a "93% labor theory of value".<ref>{{Cite journal|last=Stigler|first=George J.|year=1958|title=Ricardo and the 93% Labor Theory of Value|url=https://www.jstor.org/stable/1809772|journal=The American Economic Review|volume=48|issue=3|pages=357–367|jstor=1809772|issn=0002-8282}}</ref>

Ricardo's most famous work is his ''[[Principles of Political Economy and Taxation]]'' (1817). He advanced a [[labour theory of value]]:<ref>Ricardo, David (1817) "On the Principles of Political Economy and Taxation". Piero Sraffa (Ed.) ''Works and Correspondence of David Ricardo'', Volume I, Cambridge University Press, 1951, p. 11.</ref>

<blockquote>The value of a commodity, or the quantity of any other commodity for which it will exchange, depends on the relative quantity of labour which is necessary for its production, and not on the greater or less compensation which is paid for that labour.</blockquote>

Ricardo's note to Section VI:<ref>Ricardo, David (1817) ''On the Principles of Political Economy and Taxation''. Piero Sraffa (Ed.) ''Works and Correspondence of David Ricardo'', Volume I, Cambridge University Press, 1951, p. 47.</ref>

<blockquote>Mr. Malthus appears to think that it is a part of my doctrine, that the cost and value of a thing be the same;—it is, if he means by cost, "cost of production" including profit.</blockquote>

===Rent===
{{Main|Law of rent}}
Ricardo contributed to the development of theories of rent, wages, and profits. He defined [[Economic rent|rent]] as "the difference between the produce obtained by the employment of two equal quantities of capital and labour."<ref name=":2">{{Cite web |last=Ricardo |first=David |date=1817 |title=On The Principles of Political Economy and Taxation, by David Ricardo, 1817 |url=https://www.marxists.org/reference/subject/economics/ricardo/tax/ch02.htm |access-date=2024-05-13 |website=www.marxists.org |at=Chapter 2: Rent}}</ref> Ricardo believed that the process of economic development, which increased land use and eventually led to the cultivation of poorer land, principally benefited landowners. According to Ricardo, such premium over "real social value" that is reaped due to ownership constitutes value to an individual but is at best<ref>''On The Principles of Political Economy and Taxation'' London: John Murray, Albemarle-Street, by David Ricardo, 1817 (3rd edition 1821) – Chapter 6, "On Profits": paragraph 28, "Thus, taking the former ..." and paragraph 33, "There can, however...."</ref> a paper monetary return to "society". The portion of such purely individual benefit that accrues to scarce resources Ricardo labels "rent".

In particular, Ricardo postulates that rent is a result of increased populations which results in assets growing scarce and in some cases diminished returns of which were once abundant. Ricardo breaks down this premise by first supposing there are three fields of  land – No. 1, 2, 3, – to yield corn, with an equal employment of capital and labour. Initially land No. 1 is cultivated and is very productive as measured through the abundant surplus. Over time this abundant surplus becomes diminished as the result of an increase in population, which subsequently creates an increased demand for food. The less desired land, No. 2, must now be cultivated and eventually so must land No. 3 and so on and so forth. For Ricardo each new cultivated results in diminished surplus as the quality of land fails to yield the equal of that before it. In light of such diminishing surplus landowners see opportunities to charge rent as a means to compensate for the loss of returns on output.<ref name=":2" />

===Model-making===
According to [[sociology of quantification|sociologist of quantification]] [[Mary S. Morgan]] David Ricardo can be considered ''one of the pioneers in economic modelling''.<ref name="Morgan">{{cite book | vauthors=((Morgan, M.S.)) | year=2012 | title=The World in the Model: How Economists Work and Think | publisher=Cambridge University Press | isbn=978-1107002975}}.</ref>{{rp|45}} In studying rents, for example, Ricardo experiments  numerically to determine the relative share of profit accruing to land owner, capital holder and laborers through what Morgan calls 'numerical model farming'. In his numerical and verbal accounts Ricardo tests different improvements in capital, technology or labour to increase the yield of a farm, paralleling actual experiments run by his contemporaries such as  [[Charles Townshend, 2nd Viscount Townshend#"Turnip" Townshend|"Turnip" Townshend]].<ref name="Morgan"/>{{rp|61}}

===Ricardo's theories of wages and profits===
In his ''Theory of Profit'', Ricardo stated that as [[real wages]] increase, real profits decrease because the revenue from the sale of manufactured goods is split between profits and wages. He said in his ''Essay on Profits'', "Profits depend on high or low wages, wages on the price of necessaries, and the price of necessaries chiefly on the price of food."

==Ricardian theory of international trade==
Between 1500 and 1750 most economists advocated [[mercantilism]], which promoted the idea of international trade for the purpose of earning bullion by running a trade surplus with other countries. Ricardo challenged the idea that the purpose of trade was merely to accumulate gold or silver. With "[[comparative advantage]]" Ricardo argued in favour of industry specialisation and [[free trade]]. He suggested that industry specialization combined with free international trade always produces positive results. This theory expanded on the concept of [[absolute advantage]].

Ricardo suggested that there is mutual national benefit from trade even if one country is more competitive in every area than its trading counterpart and that a nation should concentrate resources only in industries where it has a [[comparative advantage]],<ref>{{Cite web|url=https://www.washingtontimes.com/news/2003/aug/27/20030827-084257-6403r/|title=The trade question|author=Paul Craig Roberts|date=27 August 2003|website=The Washington Times}}</ref> that is in those industries in which it has the greatest efficiency of production relative to its own alternative uses of resources, rather than industries where it holds a competitive edge compared to rival nations. Ricardo suggested that national industries which were, in fact, mildly profitable and marginally internationally competitive should be jettisoned in favour of the industries that made the best use of limited resources—the assumption being that subsequent economic growth due to better resource use would more than offset any short-run economic dislocation which would result from closing mildly profitable and marginally competitive national industries.

Ricardo attempted to prove theoretically that international trade is always beneficial.<ref>Ricardo, David (1817) ''On the Principles of Political Economy and Taxation''. Piero Sraffa (Ed.) Works and Correspondence of David Ricardo, Volume I, Cambridge University Press, 1951, p. 135.</ref> [[Paul Samuelson]] called the numbers used in Ricardo's example dealing with trade between England and Portugal the "four magic numbers".<ref>Samuelson, Paul A. (1972), "The Way of an Economist." Reprinted in ''The Collected Papers of Paul A. Samuelson''. Ed. R.C. Merton. Cambridge: Cambridge MIT Press. p. 378.</ref> "In spite of the fact that the Portuguese could produce both cloth and wine with less amount of labour, Ricardo suggested that both countries would benefit from trade with each other".

As for recent extensions of Ricardian models, see [[International trade theory#Ricardian trade theory extensions|Ricardian trade theory extensions]].

=== Comparative advantage ===
Ricardo's theory of international trade was reformulated by John Stuart Mill in 1844.<ref>Mill, J.S. (1844) ''Essays on some unsettled questions of political economy.'' London, John W. Parker; Mill, J.S. (1848) The principles of political economy. (vol. I and II) Boston: C.C. Little & J. Brown.</ref> The term "comparative advantage" was introduced by J.S. Mill and his contemporaries.

John Stuart Mill started a neoclassical turn of international trade theory, i.e. his formulation was inherited by Alfred Marshall and others, and has both contributed to the resurrection of the anti-Ricardian concept of law of supply and demand, and induced the arrival of neoclassical theory of value.<ref>Shiozawa, Y. (2017) "An Origin of the Neoclassicla Revolutions: Mill's 'Reversion' and its consequences". In Shiozawa, Oka, and Tabuchi (eds.) ''A New Construction of Ricardian Theory of International Values'', Tokyo: Springer Japan, Chapter 7 pp. 191–243.</ref>

===New interpretation===
Ricardo's four magic numbers have long been interpreted as comparison of two ratios of labour (or other input in fixed supply) coefficients. This interpretation is now considered as overly simplistic by modern economists. The point was rediscovered by Roy J. Ruffin<ref>Ruffin, R.J. (2002) David Ricardo's discovery of comparative advantage. ''History of Political Economy'' 34(4): 727–748.</ref> in 2002 and re-examined and explained in detail in Andrea Maneschi<ref>Maneschi, A. (2004) The true meaning of David Ricardo's four magic numbers. ''Journal of International Economics'' 62(2): 433–443.</ref> in 2004. The more flexible approach is now known as the ''new interpretation'', despite having been previously mentioned by [[Piero Sraffa]] in 1930 and by Kenzo Yukizawa in 1974.<ref>Tabuchi, T. (2017) Yukizawa's interpretation of Ricardo's 'theory of comparative cost'. In Senga, Fujimoto, and Tabuchi (Eds.) ''Ricardo and International Trade'', London and New York; Routledge, Chapter 4, pp. 48–59.</ref> The new interpretation affords a totally new reading of Ricardo's ''Principles of Political Economy and Taxation'' with regards to trade theory, although it does not change the mathematics of optimal resource allocation.<ref>Faccarello, G. (2017) A calm investigation into Mr. Ricardo's principle of international trade. In Senga, Fujimoto, and Tabuchi (Eds.) ''Ricardo and International Trade'', London and New York; Routledge. Tabuchi, T. (2017) Comparative Advantage in the Light of the ''Old'' Value Theories. In Shiozawa, Oka, and Tabuchi (eds.) ''A New Construction of Ricardian Theory of International Values'', Tokyo: Springer Japan, Chapter 9 pp. 265–280.</ref>

=== Protectionism ===
Like Adam Smith, Ricardo was an opponent of [[protectionism]] for national economies, especially for agriculture. He believed that the British "[[Corn Laws]]"—imposing tariffs on agricultural products—ensured that less-productive domestic land would be cultivated and rents would be driven up {{harv|Case|Fair|1999|pp=812, 813}}. Thus, profits would be directed toward landlords and away from the emerging industrial capitalists. Ricardo believed landlords tended to squander their wealth on luxuries, rather than invest. He believed the Corn Laws were leading to the stagnation of the British economy.<ref>Letter of Mill cited in ''The works and correspondence of David Ricardo : Volume 9, Letters July 1821–1823'' (Cambridge, UK, 1952)</ref> In 1846, his nephew [[John Ricardo|John Lewis Ricardo]], [[Member of Parliament (United Kingdom)|MP]] for [[Stoke-upon-Trent (UK Parliament constituency)|Stoke-upon-Trent]], advocated [[free trade]] and the repeal of the Corn Laws.

Modern empirical analysis of the Corn Laws yields mixed results.<ref>{{Cite journal |doi=10.1016/0014-4983(90)90007-L |title=The impact of the Corn Laws just prior to repeal |journal=Explorations in Economic History |volume=27 |issue=2 |page=123 |year=1990 |last1=Williamson |first1=J.G.}}</ref> Parliament repealed the Corn Laws in 1846.

=== Technological change ===
Ricardo was concerned about the impact of technological change on labour in the short-term.<ref name=":0">{{Cite journal|last=Hollander|first=Samuel|year=2019|title=Retrospectives Ricardo on Machinery|journal=Journal of Economic Perspectives|volume=33|issue=2|pages=229–242|doi=10.1257/jep.33.2.229|issn=0895-3309|doi-access=free}}</ref> In 1821, he wrote that he had become "convinced that the substitution of machinery for human labour, is often very injurious to the interests of the class of labourers", and that "the opinion entertained by the labouring class, that the employment of machinery is frequently detrimental to their interests, is not founded on prejudice and error, but is conformable to the correct principles of political economy."<ref name=":0" /> Ricardo's idea of technological change is now formulated in a modern form.<ref name="Shiozawa20">Shiozawa, Y. (2020) A new framework for analyzing technological change. ''Journal of Evolutionary Economics''. '''30''': 989–1034.</ref>

=== Criticism of the Ricardian theory of trade ===
Ricardo himself was the first to recognize that comparative advantage is a domain-specific theory, meaning that it applies only when certain conditions are met. Ricardo noted that the theory applies only in situations where capital is immobile. Regarding his famous example, he wrote:
<blockquote>it would undoubtedly be advantageous to the capitalists [and consumers] of England ... [that] the wine and cloth should both be made in Portugal [and that] the capital and labour of England employed in making cloth should be removed to Portugal for that purpose.<ref name="Ricardo 1821 7.19">{{Cite book |title=On the Principles of Political Economy and Taxation |url=https://archive.org/details/onprinciplespol00ricagoog |last=Ricardo |first=David |publisher=John Murray |year=1821 |pages=7.19 }}</ref>
</blockquote>

Ricardo recognized that applying his theory in situations where capital was mobile would result in [[offshoring]], and thereby economic decline and job loss. To correct for this, he argued that (i) "most men of property [will be] satisfied with a low rate of profits in their own country, rather than seek[ing] a more advantageous employment for their wealth in foreign nations", and (ii) capital was functionally immobile.<ref name="Ricardo 1821 7.19"/>

Ricardo's argument in favour of [[free trade]] has also been attacked by those who believe trade restriction can be necessary for the economic development of a nation. [[Utsa Patnaik]] claims that Ricardian theory of [[international trade]] contains a logical fallacy. Ricardo assumed that in both countries two goods are producible and actually are produced, but developed and underdeveloped countries often trade those goods which are not producible in their own country. In these cases, one cannot define which country has comparative advantage.<ref>{{cite book |first=Uta |last=Patnaik |year=2005 |chapter=Ricardo's Fallacy/ Mutual Benefit from Trade Based on Comparative Costs and Specialization? |editor-last=Jomo |editor-first=K.S. |title=The Pioneers of Development Economics: Great Economists on Development |publisher=Zed books |location=London and New York |pages=31–41 |isbn=8185229996}}</ref>

Critics also argue that Ricardo's theory of [[comparative advantage]] is flawed in that it assumes production is continuous and absolute. In the real world, events outside the realm of human control (e.g. natural disasters) can disrupt production. In this case, specialisation could cripple a country that depends on imports from foreign, naturally disrupted countries. For example, if an industrially based country trades its manufactured goods with an [[agrarian country]] in exchange for agricultural products, a natural disaster in the agricultural country (e.g. drought) may cause the industrially based country to starve.

As [[Joan Robinson]] pointed out, following the opening of free trade with England, Portugal endured centuries of economic underdevelopment: "the imposition of free trade on Portugal killed off a promising textile industry and left her with a slow-growing export market for wine, while for England, exports of cotton cloth led to accumulation, mechanisation and the whole spiralling growth of the industrial revolution". Robinson argued that Ricardo's example required that economies be in static equilibrium positions with full employment and that there could not be a trade deficit or a trade surplus. These conditions, she wrote, were not relevant to the real world. She also argued that Ricardo's math did not take into account that some countries may be at different levels of development and that this raised the prospect of 'unequal exchange' which might hamper a country's development, as we saw in the case of Portugal.<ref>{{cite book |last1=Robinson |first1=Joan |title=Aspects of Development and Underdevelopment |date=1979 |publisher=Cambridge University Press |location=Cambridge |isbn=0521226376 |page=[https://archive.org/details/aspectsofdevelop0000robi/page/103 103] |url=https://archive.org/details/aspectsofdevelop0000robi/page/103 }}</ref>

The development economist [[Ha-Joon Chang]] challenges the argument that free trade benefits every country:
<blockquote><div>
Ricardo's theory is absolutely right—within its narrow confines. His theory correctly says that, ''accepting their current levels of technology as given'', it is better for countries to specialize in things that they are relatively better at. One cannot argue with that. His theory fails when a country wants to acquire more advanced technologies—that is, when it wants to develop its economy. It takes time and experience to absorb new technologies, so technologically backward producers need a period of protection from international competition during this period of learning. Such protection is costly, because the country is giving up the chance to import better and cheaper products. However, it is a price that has to be paid if it wants to develop advanced industries. Ricardo's theory is, thus seen, for those who accept the ''status quo'' but not for those who want to change it.<ref>Chang, Ha-Joon (2007), "Bad Samaritans", Chapter 2, pp. 30–31.</ref>
</div></blockquote>

==Ricardian equivalence==
{{main|Ricardian equivalence}}
Another idea associated with Ricardo is Ricardian equivalence, an argument suggesting that in some circumstances a government's choice of how to pay for its spending (''i.e.,'' whether to use tax revenue or issue debt and run a deficit) might have no effect on the economy. This is due to the fact the public saves its excess money to pay for expected future tax increases that will be used to pay off the debt. Ricardo notes that the proposition is theoretically implied in the presence of intertemporal optimisation by rational taxpayers: but that since taxpayers do not act so rationally, the proposition fails to be true in practice. Thus, while the proposition bears his name, he does not seem to have believed it. Economist [[Robert Barro]] is responsible for its modern prominence.

==Influence and intellectual legacy==
David Ricardo's ideas had a tremendous influence on later developments in economics. US economists rank Ricardo as the second most influential economic thinker, behind Adam Smith, prior to the twentieth century.<ref>Davis, William L., Bob Figgins, David Hedengren, and Daniel B. Klein. "Economics Professors' Favorite Economic Thinkers, Journals and Blogs (along with Party and Policy Views)", ''Econ Journal Watch'' 8(2): 126–146, May 2011 [https://econjwatch.org/articles/economics-professors-favorite-economic-thinkers-journals-and-blogs-along-with-party-and-policy-views].</ref>

===Ricardian socialists===
{{main|Ricardian socialism}}

Despite his laissez-faire capitalist views, Ricardo's writings fascinated a number of early socialists in the 1820s, who thought his value theory had radical implications. They argued that, in view of labour theory of value, labour produces the entire product, and the profits capitalists get are a result of exploitations of workers.<ref>Landreth Colander 1989 ''History of Economic Thought'' 2nd Ed., p. 137.</ref> These include [[Thomas Hodgskin]], [[William Thompson (philosopher)|William Thompson]], [[John Francis Bray]], and [[Percy Ravenstone]].

===Georgists===
[[Georgists]] believe that rent, in the sense that Ricardo used, belongs to the community as a whole. [[Henry George]] was greatly influenced by Ricardo, and often cited him, including in his most famous work, ''[[Progress and Poverty]]'' from 1879. In the preface to the fourth edition he wrote: "What I have done in this book, if I have correctly solved the great problem I have sought to investigate, is, to unite the truth perceived by the school of Smith and Ricardo to the truth perceived by the school of Proudhon and Lasalle; to show that laissez faire (in its full true meaning) opens the way to a realization of the noble dreams of socialism; to identify social law with moral law, and to disprove ideas which in the minds of many cloud grand and elevating perceptions."<ref>[[Henry George|George, Henry]], ''[[Progress and Poverty]]''. Preface to the 4th Edition, November 1880.</ref>

===Neo-Ricardians===
After the rise of the 'neoclassical' school, Ricardo's influence declined temporarily. It was [[Piero Sraffa]], the editor of the Collected Works of David Ricardo<ref>Piero Sraffa and M.H. Dobb, editors (1951–1973). ''The Works and Correspondence of David Ricardo''. Cambridge University Press, 11 volumes.</ref> and the author of seminal ''Production of Commodities by Means of Commodities'',<ref>Sraffa, Piero 1960, ''Production of Commodities by Means of Commodities: Prelude to a Critique of Economic Theory''. Cambridge University Press.</ref> who resurrected Ricardo as the originator of another strand of economic thought, which was effaced with the arrival of the neoclassical school. The new interpretation of Ricardo and Sraffa's criticism against the marginal theory of value gave rise to a new school, now named neo-Ricardian or Sraffian school. Major contributors to this school include [[Luigi Pasinetti]] (1930–2023), [[Pierangelo Garegnani]] (1930–2011), [[Ian Steedman]] (1941–), [[Geoffrey Harcourt]] (1931–2021), [[Heinz Kurz]] (1946–), [[Neri Salvadori]] (1951–), [[Pier Paolo Saviotti]] (–) among others. See also [[Neo-Ricardianism]]. The Neo-Ricardian school is sometimes seen to be a component of [[Post-Keynesian economics]].

====Neo-Ricardian trade theory====
Inspired by [[Piero Sraffa]], a new strand of trade theory emerged and was named neo-Ricardian trade theory. The main contributors include [[Ian Steedman]] and [[Stanley Metcalfe (trade theorist)|Stanley Metcalfe]]. They have criticised neoclassical international trade theory, namely the [[Heckscher–Ohlin model]] on the basis that the notion of capital as primary factor has no method of measuring it before the determination of profit rate (thus trapped in a logical vicious circle).<ref>{{cite book |editor-last=Steedman |editor-first=Ian |year=1979 |title=Fundamental Issues in Trade Theory |location=London |publisher=Macmillan |isbn=0333258347}}</ref><ref>{{cite book |last=Steedman |first=Ian |title=Trade Amongst Growing Economies |publisher=Cambridge University Press |location=Cambridge, UK |year=1979 |pages={{Page needed |date=April 2011}} |isbn=0521226716 |url-access=registration |url=https://archive.org/details/tradeamongstgrow0000stee }}</ref> This was a second round of the [[Cambridge capital controversy]], this time in the field of international trade.<ref>{{cite book |first=Chris |last=Edwards |year=1985 |title=The Fragmented World: Competing Perspectives on Trade, Money, and Crisis |location=London and New York |publisher=Methuen & Co. |chapter=§&nbsp;3.2 The 'Sraffian' Approach to Trade Theory |pages=48–51 |isbn=0416733905}}</ref> Depoortère and Ravix judge that neo-Ricardian contribution failed without giving effective impact on neoclassical trade theory, because it could not offer "a genuine alternative approach from a classical point of view."<ref>Christophe Depoortère, Joël Thomas Ravix; "The classical theory of international trade after Sraffa". ''Cahiers d'économie Politique / Papers in Political Economy'' (69): 203–234, February 2015.</ref>

====Evolutionary growth theory====
Several distinctive groups have sprung out of the neo-Ricardian school. One is the evolutionary growth theory, developed notably by [[Luigi Pasinetti]], J.S. Metcalfe, Pier Paolo Saviotti, and Koen Frenken and others.<ref>Pasinetti, Luisi 1981 Structural change and economic growth, Cambridge University Press. J.S. Metcalfe and P.P. Saviotti (eds.), 1991, ''Evolutionary Theories of Economic and Technological Change'', Harwood, 275 pages. J.S. Metcalfe 1998, ''Evolutionary Economics and Creative Destruction'', Routledge, London. Frenken, K., Van Oort, F.G., Verburg, T., Boschma, R.A. (2004). ''Variety and Regional Economic Growth in the Netherlands – Final Report'' (The Hague: Ministry of Economic Affairs), 58 p.</ref><ref>{{citation |doi=10.1007/s00191-007-0081-5 |title=Export variety and the economic performance of countries |year=2008 |last1=Saviotti |first1=Pier Paolo |last2=Frenken |first2=Koen |journal=[[Journal of Evolutionary Economics]] |volume=18 |issue=2 |pages=201–218|hdl=1874/387420 |s2cid=154150526 |hdl-access=free }}</ref>

Pasinetti<ref>{{citation |author=Pasinetti, Luigi L. |title=Structural change and economic growth: a theoretical essay on the dynamics of the wealth of nations |publisher=Cambridge University Press |location=Cambridge, UK |year=1981 |isbn=0521274109 }}{{page needed|date=March 2022}}</ref><ref>{{citation |author=Pasinetti, Luigi L. |title=Structural economic dynamics: a theory of the economic consequences of human learning |publisher=Cambridge University Press |location=Cambridge |year=1993 |isbn=0521432820 }}{{page needed|date=March 2022}}</ref> argued that the demand for any commodity came to stagnate and frequently decline, demand saturation occurs. Introduction of new commodities (goods and services) is necessary to avoid economic stagnation.

====Contemporary theories====
{{Main|International trade theory#Ricardian trade theory extensions}}
Ricardo's idea was even expanded to the case of continuum of goods by Dornbusch, Fischer, and Samuelson<ref>{{citation |jstor=1828066 |pages=823–839 |last1=Dornbusch |first1=R. |last2=Fischer |first2=S. |last3=Samuelson |first3=P.A. |title=Comparative Advantage, Trade, and Payments in a Ricardian Model with a Continuum of Goods |volume=67 |issue=5 |journal=The American Economic Review |year=1977 |url=http://www.stanford.edu/~rstaiger/Comparativ-goods.pdf |url-status=dead |archive-url=https://web.archive.org/web/20110516042952/http://www.stanford.edu/~rstaiger/Comparativ-goods.pdf |archive-date=16 May 2011 }}</ref> This formulation is employed for example by Matsuyama<ref>{{Citation |last1=Matsuyama |first1=K. |year=2000 |title=A Ricardian Model with a Continuum of Goods under Nonhomothetic Preferences: Demand Complementarities, Income Distribution, and North–South Trade |journal=Journal of Political Economy |volume=108 |issue=6 |pages=1093–1120 |url=http://darkwing.uoregon.edu/~bruceb/Peter%20W.pdf |archive-url=https://web.archive.org/web/20120918000912/http://darkwing.uoregon.edu/~bruceb/Peter%20W.pdf |archive-date=2012-09-18 |url-status=live |doi=10.1086/317684 |s2cid=154166748 |postscript=.}}</ref> and others.

Ricardian trade theory ordinarily assumes that the [[Wage labour|labour]] is the unique input. This is a deficiency as intermediate goods occupies now a great part of international trade. The situation changed after the appearance of [[:ja:塩沢由典|Yoshinori Shiozawa]]'s work of 2007.<ref>{{cite journal |last=Shiozawa |first=Y. |year=2007 |title=A New Construction of Ricardian Trade Theory: A Multi-country, Multi-commodity Case with Intermediate Goods and Choice of Production Techniques |journal=Evolutionary and Institutional Economics Review |volume=3 |issue=2 |pages=141–187 |doi=10.14441/eier.3.141|s2cid=154021080 }}</ref> He has succeeded to incorporate traded input goods in his model.<ref>Y. Shiozawa (2017) The new theory of international values: An overview. Shiozawa, Oka and Tabuchi (eds.) ''A New Construction of Ricardian Theory of International Values''. Singapore: Springer. Chapter 1, pp. 3–73.</ref> His theory became more useful by the discovery of new definition of regular international values (a couple of wage rates for countries and prices for products), because it is not defined as the normal vector at a facet of world production possibility set, which is the set where all countries enjoy full employment. The new definition is given in Shiozawa and Fujimoto (2018)<ref>Shiozawa, Y., and Fujimoto, T. (2018) The nature of international competition among firms. Fujimoto and Ikuine (eds.) ''Industrial Competitiveness and Design Evolution'', Springer Japan, Tokyo. Chapter 2, pp. 43–96.</ref> and in Shiozawa (2020).<ref name="Shiozawa20"/> Shiozawa's theory of international values is now the unique theory of international trade that can treat unemployment and input trade in a general form.

Yeats found that 30% of world trade in manufacturing is intermediate inputs.<ref>{{cite book |last=Yeats |first=A. |chapter=Just How Big is Global Production Sharing? |editor-last=Arndt |editor-first=S. |editor2-first=H. |editor2-last=Kierzkowski |year=2001 |title=Fragmentation: New Production Patterns in the World Economy |publisher=Oxford University Press |location=Oxford |isbn=019924331X}}</ref> Bardhan and Jafee found that intermediate inputs occupy 37 to 38% in the imports to the US for the years from 1992 to 1997, whereas the percentage of intrafirm trade grew from 43% in 1992 to 52% in 1997.<ref>{{cite book |last1=Bardhan |first1=Ashok Deo |last2=Jaffee |first2=Dwight |year=2004 |chapter=On Intra-Firm Trade and Multinationals: Foreign Outsourcing and Offshoring in Manufacturing |editor-first=Monty |editor-last=Graham |editor2-first=Robert |editor2-last=Solow |title=The Role of Foreign Direct Investment and Multinational Corporations in Economic Development }}{{verify source|date=June 2019}}</ref>

====Unequal exchange====
Chris Edward includes Emmanuel's [[unequal exchange]] theory among variations of neo-Ricardian trade theory.<ref>Chris Edwards 1985 ''The Fragmented World: Competing Perspectives on Trade, Money and Crisis'', London and New York: Methuen. Chapter 4.</ref> [[Arghiri Emmanuel]] argued that the [[Third World]] is poor because of the international exploitation{{clarify|date=January 2015}}<!-- not clear what kind of exploitation is being described here?  is he talking about slave conditions in Sudan?  or the entering into of exchange at wages lower than those of particular other countries/cities?  or what? --> of labour.<ref>{{citation |last=Emmanuel |first=Arghiri |title=Unequal exchange; a study of the imperialism of trade |publisher=Monthly Review Press |location=New York |year=1972 |isbn=0853451885 |url=https://archive.org/details/unequalexchanges0000emma/page/ }}{{page needed|date=March 2022}}</ref><!-- with no url and no page number, it is difficult to verify this source -->{{verify source|date=January 2015}}

The unequal exchange theory of trade has been influential to the (new) [[dependency theory]].<ref>{{citation |doi=10.1016/0305-750X(78)90051-7 |title=Dependency: A formal theory of underdevelopment or a methodology for the analysis of concrete situations of underdevelopment? |year=1978 |last1=Palma |first1=G |journal=World Development |volume=6 |issue=7–8 |pages=881–924}}</ref>

==Publications==
[[File:Ricardo - Opere, 1852 - 5181784.tif|thumb|''Works'', 1852]]
Ricardo's publications included:
* ''[https://archive.org/details/highpriceofbulli10rica/page/n5/mode/2up 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.
* ''[[On the Principles of Political Economy and Taxation]]'' (1817), an analysis that concluded that [[land (economics)|land]] rent grows as population increases. It also clearly laid out the theory of [[comparative advantage]], which argued 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.
* {{cite book|last=Ricardo|first=David|editor=J.R. McCulloch|editor-link=John Ramsay McCulloch|title=The Works of David Ricardo|url=https://archive.org/details/worksofdavidrica01rica/page/n5/mode/2up|year=1888|publisher=John Murray|location=London|display-authors=0}}

His works and writings were collected in {{Cite book |title=The Works and Correspondence of David Ricardo |author=Ricardo, David |date=1981|orig-date=1951 |publisher=Cambridge University Press |isbn=0521285054 |edition= 1st paperback |location=Cambridge |oclc=10251383|editor1-last=Sraffa|editor1-first=Piero|editor1-link = Piero Sraffa|editor2-last=Dobb|editor2-first=Maurice Herbert|editor2-link=Maurice Dobb|display-authors=0}} (11 volumes)

{{clear}}

== See also ==
* [[Critique of political economy]]

== References ==
=== Citations ===
{{Reflist}}

=== Sources ===
{{Library resources box|by=yes|about=yes}}
{{refbegin}}
* {{citation |last1 = Case |first1 = Karl E. |last2 = Fair |first2 = Ray C. |year = 1999 |title = Principles of Economics |edition = 5th |publisher = Prentice-Hall |isbn = 0139619054 }}
* [[Samuel Hollander]] (1979). ''The Economics of David Ricardo''. [[University of Toronto Press]].
* G. de Vivo (1987). "Ricardo, David", ''[[The New Palgrave: A Dictionary of Economics]]'', v. 4, pp.&nbsp;183–198.
* {{citation |doi = 10.1016/B0-08-043076-7/00324-7 |chapter = Ricardo, David (1772–1823) |title = International Encyclopedia of the Social & Behavioral Sciences |pages = 13330–13334 |year = 2001 |last = Samuelson |first = P.A. |author-link = Paul Samuelson |isbn = 978-0080430768 }}
* {{in lang|fr}} [[Éric Pichet]], [https://web.archive.org/web/20071012163459/http://www.lesiecle.fr/economiste_david_riccarddo.html ''David RICARDO, le premier théoricien de l'économie''], Les éditions du siècle, 2004.
{{refend}}

==Further reading==
* {{cite book|editor-first=Giovanni A. |editor-last=Caravale |title=The Legacy of Ricardo |year=1985 |publisher= Basil Blackwell |location= Oxford |isbn= 0631136177 }}
* {{cite encyclopedia |title=David Ricardo (1772–1823) |url=https://www.econlib.org/library/Enc/bios/Ricardo.html |encyclopedia=[[The Concise Encyclopedia of Economics]] |edition=2nd |series=[[Library of Economics and Liberty]] |publisher=[[Liberty Fund]] |year=2008|isbn=978-0865976665 |editor-first=David R.|editor-last=Henderson |editor-link=David R. Henderson |pages=579–581 }}
* {{cite book|last=Skousen|first= Mark |author-link=Mark Skousen |editor-first=Ronald |editor-last=Hamowy |editor-link=Ronald Hamowy |title=The Encyclopedia of Libertarianism |chapter=  Ricardo, David (1772–1823) |chapter-url=https://sk.sagepub.com/reference/libertarianism/n265.xml|url= https://books.google.com/books?id=yxNgXs3TkJYC  |year=2008 |publisher= [[SAGE Publishing|Sage]]; [[Cato Institute]] |location= Thousand Oaks, CA |doi=10.4135/9781412965811.n222 |isbn= 978-1412965804 |oclc=750831024| lccn = 2008009151 |pages=433–434 |quote= }}

==External links==
{{Commons category}}
{{Wikiquote}}
{{wikisource|works=or}}
* {{Gutenberg author | id=36323| name=David Ricardo}}
* {{Internet Archive author |sname=David Ricardo}}
* {{Librivox author |id=14338}}
* {{Hansard-contribs | mr-david-ricardo-1 | David Ricardo }}
* [https://web.archive.org/web/20070315092648/http://cepa.newschool.edu/het/profiles/ricardo.htm Biography] at New School University
* [https://web.archive.org/web/20060502201750/http://eh.net/encyclopedia/article/stead.ricardo Biography] at EH.net (Encyclopedia of Economic History)
* [http://www.economics.soton.ac.uk/staff/aldrich/ricardoindex.htm ''Ricardo on Value: the Three Chapter Ones'']. A presentation tracing the changes in the ''Principles''' (University of Southampton).

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