An essay on David Ricardo's Major Contribution to Economics

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An essay on David Ricardo’s Major Contribution to Economics

It is generally accepted that Adam Smith was the founder of modern economics, with his 1776 paper, ‘The Wealth of Nations’. If that is true then it could be argued that David Ricardo was his successor. He was undoubtedly one of, if not the most famous economist of the 19th century. In this essay I will show how David Ricardo’s school of thought influenced and still influences economics around the world today.

Ricardo was born in 1772 into a Jewish family from London; he was the 3rd oldest child in a family of 17. He was sent, for a short time, to school in Holland but at the age of 14 was employed by his father, who was a stoke broker in the City of London. At the age of 21 he was disinherited from his family for marrying outside the Jewish faith, to a Quaker. He then proceeded to set up his own company in the City of London and in a short time amassed a huge fortune. His interest in Economics was sparked when he read Adam Smiths’ ‘The Wealth of Nations’ when he was in his late twenties. In 1809 he started writing articles on the bullion controversy and in 1810 released his first major paper on it titled ‘The High Price of Bullion, A Proof of the Depreciation of Bank Notes’. This paper later formed the basis for the classical approach to the theory of money. In 1814, Ricardo retired to a newly bought country estate where he continued to write articles and papers on the economics issues of the time, and in 1817 released his most famous paper ‘Principles of the Political Economy, and Taxation’. This paper was based on Adam Smiths’ paper but was designed to set it out in a much clearer way. In 1819, after a lot of persuasion by his good friend, James Mill, Ricardo entered parliament, representing a small county in Ireland, he held this post until his death in 1923.

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Ricardo took economic thinking to a new level with his papers, and the Ricardian school of thought was the most influential school of thought for the majority of 19th century. During his life he had my three main supporters; James Mill (1773-1836), who as I mentioned above helped pushed Ricardo into parliament but not only that, it has also been argued that he acted as a ‘school-master’ helping Ricardo who hadn’t received a lot of formal education to write his treatise in 1817. The second main supporter was John McCulloch (1789-1864), a Scottish journalist who as Fetter said in 1965 ...

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