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Ricardo, Davidlocked

  • Terry Peach

David Ricardo (1772–1823)

by Thomas Phillips, exh. RA 1821

Ricardo, David (1772–1823), political economist, was born on 18 April 1772 at 36 Broad Street Buildings in the City of London, the third surviving child of Abraham Israel Ricardo (1733?–1812) and his wife, Abigail Delvalle (1753–1801). Sarah Ricardo Porter was his sister. The Ricardos belonged to the population of Spanish and Portuguese Jews who had been forced by the Inquisition to emigrate, in their case to Amsterdam, where they were established by the eighteenth century. Abraham Ricardo had followed his father into stockbroking on the Amsterdam exchange. He settled in London around 1760 and in 1769 married Abigail, whose father was a tobacco and snuff merchant, and was granted denizenship in 1771. A wealthy man, Abraham was a devout Jew and a prominent member of the Spanish and Portuguese Jewish community in London. He held strong prejudices, particularly in matters of religion, politics, and education, and insisted on strict, unquestioning compliance from his children. His independently minded son David was to react strongly against his rigid upbringing.

Family and professional life

The young Ricardo was groomed to follow in his father's steps and his education was reportedly typical of those who were destined for a mercantile life. Notably, however, his early education included a two-year spell in Amsterdam, though the precise details of the sojourn are unknown. At the age of fourteen he began working for his father as a clerk and messenger on the stock exchange and, although he was apparently allowed to have private tutors, it would seem that his subsequent education contained a strong autodidactic element. Later in life he complained bitterly of his lack of a sustained, formal education, especially in the art of written composition.

In 1792 the Ricardo family moved to Bow, close to the house of Edward Wilkinson, a Quaker and surgeon. Before long David was romantically involved with Wilkinson's reputedly beautiful daughter Priscilla Ann (1768–1849), though it seems that parental obstacles forced the young couple into a courtship by correspondence. In December 1793 David and Priscilla were married, much to the displeasure of both sets of parents. In Ricardo's case the consequences were profound: he was removed from his father's business, disinherited, and disowned by his mother—with whom he never spoke again—and his father, with whom he was reconciled only after his mother's death. The marriage was also the occasion for Ricardo's breach with his Jewish faith, a breach which, according to some accounts, was the culmination of a long period of characteristically independent soul-searching. Subsequently Ricardo attended the meetings of the Unitarians, although there is evidence to suggest that he was, or became, an agnostic. As he wrote:

On these difficult points I keep my mind in a state of doubt from which in this world I can never be relieved. To account for evil in a world governed by a being of unbounded benevolence and power is or appears to be impossible.

Works and Correspondence, 7.206

Estranged from his father, Ricardo embarked upon what was to become a hugely successful financial career. As a jobber on the stock exchange, and a loan contractor for government stock, he soon amassed a sizeable fortune, which allowed him in 1815 to begin a gradual retirement from business. From 1814 onwards he invested heavily in land, in loans on mortgages, and in French funds. The total value of his estate at death has been estimated at between £675,000 and £775,000 (1823 prices).

As Ricardo's wealth grew, so too did his family and social standing. Eight children were born between 1795 and 1810. Of the three sons, two—Osman and David—were to become MPs, and the third—Mortimer—became captain in the Life Guards and deputy lieutenant of Oxfordshire. From 1812 the family's prestigious London address was 56 Upper Brook Street, Grosvenor Square. To this was added in 1814 Ricardo's country seat of Gatcombe Park, Gloucestershire. At Gatcombe the Ricardos entertained lavishly, often hosting large, sumptuous dinner parties that would extend well into the small hours. Ricardo, a slim man, below average height with a high-pitched voice, was himself temperate in habits, but he was also sociable, humorous, and addicted to intelligent debate and conversation. Once he had entered the squirearchy (he was high sheriff of Gloucestershire in 1818), acquired his reputation as an intellectual and a political economist, and become a prominent MP (he took his seat in 1819), his company was increasingly sought by luminaries of the aristocracy, the political classes, and the intelligentsia. Ricardo was highly gratified by his success, especially by his success as an authority on his favourite subject (as he described it), political economy.

The bullion controversy

Ricardo's interest in political economy was aroused in 1799 by chancing upon a copy of Adam Smith's The Wealth of Nations in a travelling library while on a visit to Bath. Before this time it is known (as his brother Moses relates) that his predilection towards subjects of an abstract and general nature had led to a leisurely interest in scientific areas, including mathematics, chemistry, geology, and mineralogy (he was a founder member of the Geological Society in 1807). With political economy, he had stumbled across a subject which (he believed) could be treated abstractly according to the scientific principles of the time, resonated with his own experience, was intensely topical, and appeared to bear on matters no less weighty than the general welfare of society. It was to prove an irresistible mixture. Yet, although his interest was awakened, to the point where he became an avid reader of articles in the whiggish Edinburgh Review, he was for several years too preoccupied with furthering his financial career to regard political economy as anything more than 'an agreeable subject for half an hour's chat' (Works and Correspondence, 7.246). The turning point came in 1809.

The free convertibility of paper currency into gold had been suspended with the Bank Restriction Act of 1797, after which a disparity had developed between the value of coin and the (depreciated) value of banknotes. The ‘bullion controversy’ addressed the reasons for the depreciation of the paper currency, and it was this controversy that Ricardo joined in 1809 with an anonymous letter in the popular whig newspaper the Morning Chronicle. Ricardo's principal contention, developed subsequently in further letters to the Morning Chronicle and in his (signed) pamphlets The High Price of Bullion (1810–11) and Reply to Mr. Bosanquet (1811), was that the depreciation of the paper currency was owing to the Bank of England's over-issue of notes which, in the absence of convertibility, had resulted in an increase of prices of approximately 20 per cent and a rise in the market over the mint price of gold. The remedy he proposed was a (phased) return to convertibility. His case was prosecuted with syllogistic precision and, also typical of his approach, flourishing references to the 'scientific' principles of the subject.

The contributions to the bullion controversy brought Ricardo to the attention of leading political and intellectual figures, including Thomas Robert Malthus and James Mill. Both Malthus and Mill were to play critical roles in the development of Ricardo's subsequent career. Their influences were, however, profoundly different. At the time of Ricardo's entrance on the public stage, Malthus was a seasoned writer, the author of the controversial Essay on Population, and arguably the most prominent political economist of the day. Although he and Ricardo became, and remained, close friends, their intellectual relationship was marked by disagreement over numerous issues bearing on virtually all branches of the new ‘science’ of political economy. While Ricardo borrowed from Malthus on some points (including population theory and the theory of differential rent), many of the characteristic features of his work evolved dialectically from his long-running intellectual skirmishes with his contemporary. Scholars of Ricardo (and Malthus) are fortunate to find a high proportion of the extensive RicardoMalthus correspondence preserved in the superb edition by Piero Sraffa, The Works and Correspondence of David Ricardo.

James Mill also became a close friend of Ricardo but his role was more akin to a manager's. Although he had been an early contributor of articles on political economy to the Edinburgh Review, at the time of meeting Ricardo he was engrossed in writing his History of British India and it seems unlikely that he directly contributed much to the development of Ricardo's political economy (possibly with the exception of the ‘law of markets’ and, more uncertainly, the theory of comparative advantage in international trade). But he evidently saw in Ricardo a kindred spirit whose talents were deserving of his nurture. Mill advised, encouraged, cajoled, and even (only semi-humorously) bullied the ever reticent and easily distracted Ricardo, who almost certainly would not have completed his major work without Mill's prodding. It was also Mill, the associate of Jeremy Bentham and popularizer of Bentham's work, who was to push the initially sceptical Ricardo in the direction of political utilitarianism and persuade him to enter parliament. Without Mill, it seems improbable that Ricardo's star would have risen above the general horizon.

On the Principles of Political Economy and Taxation

Following his involvement in the bullion controversy, Ricardo's next significant publication was his Essay on the influence of a low price of corn on the profits of stock; shewing the inexpediency of restrictions on importation (1815). As its title suggests, the Essay was written in opposition to (controversial) proposals for the imposition of new, higher duties on the importation of corn. Ricardo's central argument was as follows. On the assumption that free importation is prohibited, the increasing demand for corn from a growing population would have to be met either by the more intensive cultivation of land already under the plough, or from new, less fertile or more disadvantageously situated land. Either way, the expansion of output would tend to encounter diminishing returns which would in turn lead to a higher price of corn, higher money wages (since corn, or bread, was the staple food of the labourers), and therefore a lower general rate of profits. Only the landlords would benefit in virtue of their receiving more differential rent; for, as Malthus had argued, rent is a category of income which derives from and is equal to the difference in return from the 'best' land and the 'worst' (the assumption being that the 'worst' land yields no income above that required to give farmers the general rate of profit). As for the capitalists (including the capitalist farmers), they would suffer directly from the fall in profitability, while the labourers would shoulder the consequences of a reduction in the demand for labour, itself a result of lower profitability. Hence Ricardo's pithy deduction, which was not to endear him to the country gentlemen (of whom he was now one), that 'the interest of the landlord is always opposed to the interest of every other class in the community' (Works and Correspondence, 4.21).

The Essay was to prove a watershed in Ricardo's intellectual development; it was a transitional work in which Ricardo repudiated some of the fundamental tenets of the prevailing orthodoxy, as derived from Adam Smith and upheld by Malthus, while failing to supply a fully consistent logical alternative. It was Mill who persuaded Ricardo to develop and publish his ideas in the form of a major treatise. In August 1815 Mill threatened Ricardo with 'no rest, till you are plunged over head and ears in political economy' (Works and Correspondence, 6.252). Two years later Mill's exhortations were rewarded with the publication of Ricardo's On the Principles of Political Economy and Taxation (1817, hereafter abbreviated to Principles), the work for which Ricardo is best remembered. But authorship of his major work had not come easily. Apart from difficulties with the subject matter, Ricardo had also to contend with a hectic social life, recurring bouts of lethargy and defeatism, a 'temptation of being out in the air in fine weather' (Works and Correspondence, 6.264), business interests, and the demands of a large family. He was also side-tracked by a commitment he had made to Pascoe Grenfell MP to write a pamphlet subsequently published under the title Proposals for an Economical and Secure Currency (1816), in which Ricardo inveighed against the large profits made by the Bank of England as a result of their dealings with the government, canvassed his plan for a return to paper currency convertibility with gold bullion rather than minted coin, and intimated his approval for the establishment of an independent central bank (a proposal developed in the posthumous Plan for the Establishment of a National Bank, 1824). All things considered, the Principles was the outcome of little more than six or seven months' sustained activity on Ricardo's part.

The 'principal problem in Political Economy' is defined in the Principles as the determination of the 'laws' which regulate 'the natural course of rent, profit, and wages' over time. These issues had been addressed in the Essay and, indeed, the Principles was initially conceived by Ricardo as an Essay writ large. In the process of writing the later work, however, its scope was enlarged in previously unforeseen ways as Ricardo developed his ideas. The result was a volume comprising thirty-one chapters, covering not only the 'laws' governing rent, profit, and wages (which were broadly similar to ideas put forward in the Essay), but also a newly developed labour theory of value (explaining the relative values of commodities by the relative amounts of labour time expended on their production), a theory of international comparative advantage (according to which a country may benefit from trade even though it has an absolute cost disadvantage in the production of all commodities), monetary theory, several chapters devoted to 'the influence of taxation on different classes of the community', and strictures on the writings of predecessors and contemporaries. Following the publication of an essentially unchanged second edition in 1819, the third edition of 1821 contained a new chapter 'On machinery' in which Ricardo, borrowing from the work of John Barton, famously declared 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' (Works and Correspondence, 1.392). It also contained a substantially rewritten chapter 'On value', in which Ricardo attempted to defend himself against penetrating criticisms of his labour theory which had been articulated by Malthus in the latter's own Principles of Political Economy (1820).

Political career

There was a great deal riding on the success of the Principles, not just Ricardo's gathering reputation as a political economist. Mill had suggested in 1815 that Ricardo should enter parliament, a suggestion from which the latter had recoiled with horror. One year later Ricardo was becoming more amenable to Mill's plan, writing to his friend: 'If my book succeeds, perhaps my ambition will be awakened, and I may aspire to rank with senators' (Works and Correspondence, 7.113). In fact, though his book did not meet with unanimous acclaim, it did succeed to an extent far surpassing Ricardo's self-deprecatory expectations. With this success Ricardo's circle widened to embrace notables including Lord Grenville (the former prime minister), the marquess of Lansdowne (previously chancellor of the exchequer and now a leader of the whig opposition), and Sir Samuel Romilly (erstwhile solicitor-general and the whig with whom Ricardo had perhaps the greatest affinity); also, around the same time (1817–18), Ricardo was elected to the King of Clubs (associated with the Edinburgh Reviewers) and to Brooks's Club, the centre for the parliamentary whig opposition (he was proposed by Lord Holland and Lord Essex). Ricardo thus succumbed to Mill's plan.

Ricardo took his seat in parliament on 26 February 1819, succeeding his acquaintance Richard ‘Conversation’ Sharp as the (independent) member for the rotten borough of Portarlington in Ireland—a constituency which Ricardo never visited, where sheep vastly outnumbered the twelve or so electors, and for which Ricardo had advanced the sum of £25,000 to Lord Portarlington as a loan on the mortgage on his estates. At first terrified by the sound of his own voice, Ricardo gradually gained in confidence, availing himself of every opportunity to educate the house in the 'true principles of political economy'. These principles, enunciated both from the floor of the house and in select committees, dictated, inter alia: the gradual repeal of trade restrictions generally and of the corn law in particular; the gradual repeal of the poor laws; the repayment of the national debt (which Ricardo believed heroically could be accomplished over two or three years by the imposition of a property tax); minimal taxation and a balanced budget; and a return to a convertible currency. With the signal exception of convertibility (Peel's bill of 1819 for the resumption of cash payments owed much to his proposals), Ricardo found himself on the losing side, but that did nothing to shake his convictions. His parliamentary contributions mark him as a zealous advocate of a free-market capitalist system with minimal government interference—far more zealous and uncompromising than Adam Smith before him—who believed that Great Britain 'would be the happiest country in the world, and its progress in prosperity would be beyond the power of imagination to conceive, if we got rid of two great evils—the national debt and the corn laws' (Works and Correspondence, 5.55). Additionally, Ricardo spoke out on a range of liberal issues, including religious tolerance, slavery, freedom of speech, and the right to petition (he opposed the Six Acts). He also aligned himself with the radical cause for the reform of parliament, the subject on which he most clearly distanced himself from mainstream whig opinion.

The contention that good government would not be achieved without a reform of parliament had been put to Ricardo by James Mill in 1815 but was at that time rejected on the grounds that Mill both exaggerated the 'sinister interest' of politicians in pursuing their own ends and undervalued the corrective influence of enlightened public opinion. Three years later Ricardo's position had changed. Partly as a result of Mill's bombardment of Ricardo with radical messages, partly because of Ricardo's growing conviction that the tory government was failing to pursue 'right measures', and finally after reading Jeremy Bentham's Plan of Parliamentary Reform, Ricardo was won over to the radical cause. As he came to argue, good government—government 'administered for the happiness of the many, and not for the benefit of the few' (Works and Correspondence, 7.299)—required that politicians should 'legislate for the public benefit only, and not … attend to the interests of any particular class' (Works and Correspondence, 8.275); yet, under present arrangements, politicians fell prey to the interests of particular classes, especially the landed class (vide the 1815 corn law); hence the necessity for reform. However, Ricardo's proposals fell some way short of those of his radical contemporaries. The introduction of the secret ballot was, for him, an almost sufficient basis for securing good government under existing circumstances, although he did make a case for triennial parliaments and a modest extension of the franchise to include householders. He might therefore be described as a moderate reformer in the utilitarian tradition of Bentham and Mill: as he once declared, 'I … am a disciple of the Bentham and Mill School' (Works and Correspondence, 8.52).

Ricardo's parliamentary duties made significant encroachments on his time, although they did not prevent him from contributing an article headed 'Funding system' to the Encyclopaedia Britannica (1820), making extensive changes to the third edition of his Principles (1821), co-founding the Political Economy Club (1821), reiterating his opposition to the corn laws in the pamphlet On Protection to Agriculture (1822), drafting his Plan for the Establishment of a National Bank (1823), and embarking on a grand tour of continental Europe with his family (1822). In the last year of his life he painted the following picture of life at Gatcombe to an old friend: 'we shall walk and ride, we will converse on politics, on Political Economy, and on Moral Philosophy, and neither of us will be the worse for the exercise of our colloquial powers' (Works and Correspondence, 9.377). But it was not to be. On 11 September 1823 Ricardo died at Gatcombe Park from the effects of an abscess in the middle ear. One week later he was buried in the churchyard of St Nicholas Hardenhuish, near Chippenham, Wiltshire, adjoining the Hardenhuish Park estate of his daughter Henrietta and her husband, Thomas Clutterbuck.


Maria Edgeworth, a friend of Ricardo, described him as 'altogether one of the most agreeable persons, as well as the best informed and most clever, that I ever knew' (Works and Correspondence, 10.170), a view that seems to have been shared by his many friends and acquaintances. He was also a generous man, who provided almshouses, schools, an infirmary, and a savings bank in his own locality, contributed to a string of charities, and patronized the arts. It is, however, as a political economist that he is best remembered, although the bewildering array of evaluations and interpretations of his work make it impossible to state uncontroversially just what it is that he is best remembered for.

Debate over Ricardo's contribution to political economy began during his own lifetime. The ‘new school’ of Ricardo, as it came to be known about 1820, was subjected to criticism for a catalogue of perceived errors, including: over-abstraction and the generation of 'noxious' theoretical paradoxes, the use of an absolute concept of value related exclusively to the expenditure of labour, use of a labour theory of value more generally, the neglect of supply and demand considerations in price determination, underestimation of improvements in agriculture, hostility towards landlords, a deficient theory of profits, and the use of the ‘law of markets’ (the doctrine, in short, that supply creates its own demand, implying that there is no demand constraint on the growth of aggregate output and employment). At the same time, the new school was busily consolidating its position, partly as a result of Ricardo's personal authority, but also owing to the proselytizing efforts of Ricardo's inner circle of disciples, J. R. McCulloch in particular.

McCulloch had published a laudatory review of Ricardo's Principles in the Edinburgh Review, and thenceforth he was the fount of a stream of literature, including the authoritative entry 'Political economy' for the supplement to the fourth edition of Encyclopaedia Britannica (1823), which at least gave the impression of a thriving Ricardian orthodoxy. The youthful J. S. Mill, James Mill, and Thomas De Quincey were also instrumental in championing a Ricardian cause. Yet it is by no means clear that Ricardianism, as it developed in the 1820s, would have commanded Ricardo's personal assent: the virtual abandonment of Ricardo's version of the labour theory of value is a case in point. With Ricardo's death in 1823, his disciples were given licence to apply their own gloss to his doctrines (as they interpreted them, often imperfectly), to incorporate their own innovations, and to trim their sails in the shifting winds of contemporary criticism. By the 1830s aspects of Ricardian economics, now barely distinguishable from the outpourings of McCulloch, were coming under renewed fire from leading intellectuals including Nassau Senior, G. P. Scrope, Richard Jones, and William Whewell. For all the criticism, however, the opponents of the new school were not successful in supplanting Ricardianism with an alternative body of doctrine, partly because they disagreed among themselves, perhaps also because their rejection of orthodoxy was never complete. Where the critics did succeed was in helping to generate an enduring view of political economy as a pseudo-science riven by disagreement among its practitioners. Hence, while it may be true to say that Ricardianism continued to hold sway in the 1830s, and even during the early 1840s, it was more a victory by default than by acclaim.

The publication in 1848 of J. S. Mill's Principles of Political Economy did much to revive Ricardo's flagging reputation—Mill hailed Ricardo as 'the greatest political economist'—though debate still continues as to whether Mill's work is truly in the Ricardo (as distinct from the more capacious Ricardian) mould. In 1890 Alfred Marshall argued that, interpreted 'generously', Ricardo's work was wholly consistent with Marshall's version of neo-classical economics. But by that time the question of Ricardo's legacy had been thrown open by the intervention of Karl Marx, who praised Ricardo highly for his attempt to develop a labour theory of value: a project which Marx portrays himself as bringing to a satisfactory completion. By the dawn of the twentieth century the name of Ricardo was still very much alive, although the ideas behind the name were a matter of lively controversy.

Twentieth-century scholarship has done little to resolve the interpretative and evaluative questions thrown up in the previous century. Mention should be made, however, of J. M. Keynes's virtual identification of Ricardo's economics with the law of markets, of which Keynes complained bitterly; of Joseph Schumpeter's indictment of Ricardo for the 'Ricardian vice' (the direct application of simple economic models to the solution of real-world problems); of the view of Ricardo as the brilliant precursor of 'neo-Ricardian' or 'Sraffian' economics, a non-neo-classical species of abstract economic analysis developed by Ricardo's modern editor, Piero Sraffa; and of Samuel Hollander's endeavour, reminiscent of Marshall's, to portray Ricardo as a sophisticated, embryonically neo-classical economist.

Leaving aside the quirks, foibles, and peculiar agendas of his interpreters and critics, and the undoubted confusion between Ricardo's and Ricardian economics, there is an explanation for the differences in interpretation which can be rooted in the nature of Ricardo's own writing. Ricardo was not an academic in the modern sense. He worked only intermittently on his political economy over a relatively short period of his mature life during which he had many other demands on his time. It is therefore unsurprising to find inconsistencies and loose ends in his writings—it would be surprising not to find them—and it is these which may have facilitated the contradictory readings. Yet—at the risk of pronouncing on a case which may remain forever sub judice—there is a core to Ricardo's theoretical system, comprising the labour theory of value (including a conception of absolute value related to labour expenditure), a subsistence treatment of wages (according to which a given, culturally influenced subsistence, or 'natural', wage is an active centre of gravity of market wages), the theory of differential rent, a 'surplus' calculation of profit (that is, profit is equal to net output minus wage costs), the notion of an inverse relationship between wages and profits, and the law of markets. Ricardo was a brilliant, penetrating thinker, capable of working at a level of abstraction far above his contemporaries. It is a tribute to his genius, though not always to that of his interpreters, that his writings remain a continuing source of fascination.


  • The works and correspondence of David Ricardo, ed. P. Sraffa and M. H. Dobb, 11 vols. (1951–73), vols. 1–10
  • M. Blaug, Ricardian economics (1958)
  • E. Halévy, The growth of philosophic radicalism, trans. M. Morris, new edn (1972) [Fr. orig., La formation du radicalisme philosophique, 3 vols. (1901–4)]
  • S. Hollander, The economics of David Ricardo (1979)
  • T. Peach, Interpreting Ricardo (1993)


  • BLPES, papers relating to estate
  • CUL, corresp. and papers
  • Trinity Cam., corresp.
  • UCL
  • University of Illinois Library, Chicago, papers
  • BL, letters to J. R. McCulloch, Add. MS 34545
  • UCL, letters to Hutches Trower


  • T. Heaphy, miniature, 1820, priv. coll.
  • T. Phillips, portrait, exh. RA 1821, priv. coll. [see illus.]
  • V. Bonelli, marble bust, 1822, priv. coll.
  • T. Hodgetts, mezzotint, pubd 1822 (after T. Phillips), BM, NPG
  • W. Holl, stipple, pubd 1839 (after T. Phillips), BM, NPG

Wealth at Death

approximately £675,000–£775,000: Works, ed. Sraffa