on March 25, 2000
The ideas put forward by Ricardo in this book challenges some of the ideas presented by Adam Smith in the Wealth of Nations, particularly in the principles of economic rent. Ricardo also revealed interesting insights on the subject of value in chapter 1.
To understand the text fully,it would be advisable to have read Adam Smith's Wealth of Nations, another book in the Great Minds Series, which I had also painfully digested.
Like other books in the Great Mind's series, have a good cup of coffee ready. It is a very challenging and difficult read. Nevertheless, it is a worthwhile read for those serious in understanding the foundations of the present economic systems.
on February 2, 2012
This Maestro Reprints (aka CreateSpace) text is a reprint of the 1st Edition of Ricardo's work.
Ricardo's ideas on political economy, especially on labor value, rent and comparative advantage, were extremely influential in the evolution of classical economics and deserve careful reading. However Ricardo's initial discussion of labor value contained some significant issues, and Ricardo made considerable revisions to this section in the 3rd Edition, as well as other scattered changes. For a modern reader trying to understand Ricardo's ideas, it is probably best to start with the 3rd Edition, as best representing his final position.
The Maestro Edition also contains some significant typos in tables in the first and second chapters. This causes conflicts between the tables and the text.
After realizing these issues with the Maestro/CreateSpeace version, I switched to the Liberty Fund version, which is based on a scholarly UK edition sponsored by the Royal Economic Society. That text is based on Ricardo's 3rd Edition, but also includes footnotes or appendices with the text from earlier editions for any revised sections.
Based on what I've seen, I'd definitely recommend the Liberty Fund version as the better text.
on January 6, 2001
Some authors you read, and perhaps think, "I wish I'd written that!" Ricardo, like Adam Smith and John Locke, are in another league altogether. The originality of mind is stunning. Smith, Mill, Malthus and J.B. Say are all more readable, which I fear sounds like a very poor recommendation for Ricardo! Still, I was so bowled over by the originality of his theoretical line, that I forgave much slow slogging through a difficult text. His theory of rent is I think quite misguided, but is so powerfully presented that I was hard put to think how I might argue against it were Ricardo to appear before me in person. I took this book about ten pages at a time, and found it well worth the trouble.
on February 12, 2003
Along with Adam Smith, the Englishman David Ricardo is one of the fathers of the so-called Classics school of economic thought, and the Principles is his major opus, one he was very much reluctant to write, but only did so at the urgings of James Mill and his son John. Written in the first half of the 19th victorian century, he was nonetheless, a very freed mind, who did not accept or indulge in the extravagancies of the beginning of the industrialization proccess in England. To David Ricardo, Karl Marx owes a good share of his theory of labour, something essential in the labour movements of then. The concepts adapted and created by David Ricardo is transported to the text in a dry and concise style, not too much worried in polemics, but only interested in address the topics he raises in a very precise way. IF you are a student of Social Sciences, this book is a must.
on June 4, 2011
Mr. Davies one-star review almost scared me away, but I took a chance on this anyway. I'm happy to say that this free Kindle edition, ASIN: B004TPGM3G, now has no problems. I've seen no scanning errors and it has a linked table of contents, linked footnotes, and linked index. It would be hard to find a more flawless eBook.
The only complaint I can make is that the table of contents does not show up on the Kindle "Go To" page. I've found this to be a common problem. Nevertheless, the TOC is there and can be bookmarked for reference if you need to return to it frequently.
(BTW, I thank Davies for his negative review. It was probably his review that prompted the publisher to clean this edition up.)
on March 15, 2010
I got this book, well frankly because I wanted to read John Maynard Keynes' General Theory. I got 2 pages into it and realized that I needed to do a little more background work. Keynes referred to Ricardo a bunch in those first few pages, so I skipped to this book.
I am VERY glad that I read Adam Smith's "Wealth of Nations" before I read this book. Ricardo constantly refers back to it. He also refers to Malthus, Buchannan and Say alot. I did learn a great deal in this book-and he proved very effectively some points that seemed counter-intuitive to me. There are a few things that I still don't agree with, but I recognize this as a the next step down the road to modern economics.
The language in this book was more "modern english" than "The Wealth of Nations" but still not what I would consider entirely modern. Another thing that made this book a little more readable was the lack of long digressions on various things. Ricardo's examples were short and very illustrative. "The Wealth of Nations" was laced with Enlightenment philosophy which really made my little libertarian heart flood with joy. There was none of that, here. Very much more like a text book.
The reason I knocked off a star was Ricardo's habit of taking great pains to explain in great detail how this or that would happen under this or that circumstance...and then in 1 paragraph at the end explain why this would never actually happen, or explain why he didn't really mean what it sounded like he was saying. Frustrating.
Overall, a good and very worthwhile read. Don't expect to be entertained-but expect to learn something.
David Ricardo (1772-1823) was an English political economist, businessman, financier, and member of Parliament. He wrote in the Preface to the 1817 edition of this book, "The produce of the earth... is divided among three classes of the community, namely, the proprietor of the land, the owner of the stock or capital necessary for its cultivation, and the laborers by whose industry it is cultivated. But in different stages of society, the proportions of the whole produce of the earth which will be allotted to each of these classes, under the names of rent, profit, and wages, will be essentially different... to determine the laws which regulate this distribution is the principal problem in Political Economy..."
He rejects Adam Smith's notion that a rise in the price of labor would be uniformly followed by a rise in the price of commodities; "only those commodities would rise which had less fixed capital employed upon them than the medium in which price was estimated, and that all those which had more would positively fall in price when wages rose." (Pg. 29) He later reiterates that "the rate of profits can never be increased but by a fall in wages, and that there can be no permanent fall of wages but in consequence of a fall of the necessaries on which wages are expended." (Pg. 80)
He asserts that the tendency of the English "Poor Laws" (a system of social relief) is not, as the legislature benevolently intended, to amend the condition of the poor, but "to deteriorate the condition of both poor and rich; instead of making the poor rich, they are calculated to make the rich poor." (Pg. 61) He charges that "Every new tax becomes a new charge on production, and raises natural price. A portion of the labour of the country which was before at the disposal of the contributor to the tax is placed at the disposal of the state, and cannot therefore be employed productively." (Pg. 118)
He argues that value differs from riches, because value depends not on abundance, but on the difficulty or facility of production. (Pg. 182) "One man considers money as a standard of value... Others represent money as a very convenient medium... There are others again who consider a country rich or poor according to the quantity of labour it can purchase. But why should gold, or corn, or labour, be the standard measure of value, more than coals or iron?... That commodity is alone invariable which at all times requires the same sacrifice of toil and labour to produce it." (Pg. 183) He concludes, "It is the cost of production alone which must ultimately regulate the price of commodities." (Pg. 260)
If one man is "richer" by his possession of a scarce commodity, "other men's shares must necessarily be reduced in proportion as this favoured individual is able to appropriate a greater quantity to himself." (Pg. 184) He also observes that "the substitution of machinery for human labour is often very injurious to the class of labourers." (Pg. 264)
Ricardo's book is one of the "essential" works of classical political economy, and is still of interest to students of economics today.
This work is a masterpiece of economic theory only second to
the Wealth of Nations by Adam Smith. Ricardo states that value
is a function of effort and not the price paid for labor. He
reminded us that labor plus the tools to assist labor affected
the creation of value. Therefore; increases in value were in
direct proportion to increments in labor. Value was also a
function of the time it took to bring the goods to market.
Surprisingly, the cultivation of inferior land resulted in a
higher exchangeable value of raw produce because more labor
was required in its production. If we become more efficient in
land cultivation, rents will go down because more can be
cultivated with less land. In addition, the exchangeable value
of commodities is undisturbed by natural or accidental causes.
Laborers derive their greatest pleasure when the market price
of labor exceeds the natural price. Therefore; wages will
increase in response to increases in the demand for labor.
Rises in rent are accompanied by increments in the share of
produce because landlords want more rent when harvests are
greater. Accordingly, the price of corn is a function of the labor to produce it. If wages go down, then prices must fall.
As the price of labor goes down, profits increase but the
price of the commodity may not go down. Taxes on profits
tend to increase the price of a commodity . If money is not
taxed, then all commodities will be subject to price increases.
Ultimately, a tax on land begets a tax on produce. In addition,
a tax on labor will raise its price. In addition, the price of
provisions determine the price paid to the worker. If money
decreases in value, all commodities will be subject to steep
price increases. This was seen in modern times with the
fluctuation of the Russian currency. Ultimately, bounty
lowers the price to foreigners because the government subsidizes
the bounty paid to the local merchants to stimulate trade.
The theory of rent transfers value but does not create it.
Ultimately, wages are determined by the price of food and
cost of production.
This theory of wages differs from Adam Smith who said that
wages were a function of the ease or hardship to do work, the
difficulty or expense of learning a trade, the constancy
of employment, the trust reposed in the workmen, the probability
of success or failure of the venture or the fear of misfortune.
David Ricardo's work is an important milestone in the theory
of economics and comparison to the work of Adam Smith.
on May 20, 2008
David Ricardo played a crucial role in developing Classical Economics. Ricardo was prompted to write on economics by reading The Wealth of Nations. As luck would have it, Ricardo knew James Mill (father of JS Mill) and was soon in contact with TR Malthus. The debates between Ricardo and Malthus produced a paradigm that lasted only a half a century. PPE+T is a central part of the Classical paradigm, it is Ricardo's definitive statement on economics.
PPE+T is perhaps the most tightly reasoned book written by a Classical economists (JS Mill is a close rival here). This is not fun reading but it is important as a piece of history, and elements of Ricardo's analysis remain relevant today. Given Ricardo's razor sharp intellect, one must wonder why he did not develop modern value theory himself. The tight reasoning of this book is, ironically, the source of much criticism against it. Joseph Schumpeter (among others) has lamented `the Ricardian vice', by which Ricardo arrived at policy conclusions through flawless but restrictive logical reasoning. Ricardo is hard to argue against, given his assumptions, but what if we alter these assumptions?
While Classical Economics is dead, some of its Ricardian elements live on. The Principles of Political Economy and Taxation remains relevant today largely because of Ricardo's concept of Comparative Advantage. Comparative Advantage is one of the most enduring ideas in economics. The development of the Comparative Advantage concept set Ricardo ahead of all but a few of his contemporaries. Economists still speak of Ricardian Equivalence and The Ricardo Effect. While some might object Ricardo's logical-deductive approach to political economy, few economists have stood the test of time so well. PPE+T is a timeless classic. This is not fun reading, but it is important none the less.
on November 12, 2012
In reading this, it is easy to forget that this was written well before the American Civil War. The points raised and answered by Mr. Riccardo are as valid today as when they were written. I would recommend this book, as well as Bastiat‘s works for those who wish to understand economics.