Ricardo essays

Ricardo essays DAVID RICARDO David Ricardo was born in 1772 and was the third son (out of seventeen). David Ricardo`s family was descended from Iberian Jews who had fled to Holland during a wave of persecutions in the early 18th century. His father, a stockbroker, emigrated to England shortly before Ricardo`s birth. Ricardo attended school in Holland, but left at the age of 14 to work for his father full time in the London Stock Exchange. At 21, Ricardo was disinherited from his family when he married a Quaker which was outside his orthodox Jewish faith. With his considerable reputation in London, Ricardo managed to set up his own business as a dealer in government securities. When Ricardo was in his late 20`s interest in economics as sparked by a chance reading of Adam Smith`s Wealth of Nations. In 1809 after persistent of his friend James Mill he decided to write some of his ideas down. His first article was concerning the bullion controversy, he wrote that England`s inflation was the result of the Bank of England`s propensity to issue bank notes. Ricardo`s major work was The Principles of Political Economy and Taxation (1817). This book presented most of his important theories, especially those concerned with the determination of wage and value. For the problem of wages he proposed the iron law of wages, according to which wages tend to stabilize around the subsistence level. According to his labour theory of value, Ricardo stated that the value of almost any good was, essentially, a function of the labour needed to produce it. Ricardo was also concerned with the subject of international trade, and for that he developed the theory of comparative advantage. Which states that each nation should specialize completely in the production of the good in which it has a comparative cost advantage in producing ...