In the Proposals for an Economical and Secure Currency (1816) he first disposes of the chimera of a currency without a specific standard, and pronounces in favour of a single metal, with a preference for silver, as the standard.
Ricardo's chief work, Principles of Political Economy and Taxation, appeared in 1817. The fundamental doctrine of this work is that, on the hypothesis of free competition, exchange value is determined by the labour expended in production, - a proposition not new, nor, except with considerable limitation and explanation, true, and of little practical use, as “ amount of labour ” is a vague expression, and the thing intended is incapable of exact estimation. Ricardo's theory of distribution has been briefly enunciated as follows: “ (1) The demand for food determines the margin of cultivation; (2) this margin determines rent; (3) the amount necessary to maintain the labourer determines wages; (4) the difference between the amount produced by a given quantity of labour at the margin and the wages of that labour determines profit.” These theorems are too absolutely stated, and require much modification to adapt them to real life. His theory of foreign trade has been embodied in the two propositions: “ (1) International values are not determined in the same way as domestic values; (2) the medium of exchange is distributed so as to bring trade to the condition it would be in if it were conducted by barter.”
A considerable portion of the work is devoted .to a study of taxation, which requires to be considered as a part of the problem of distribution. A tax is not always paid by those on whom it is imposed; it is therefore necessary to determine the ultimate, as distinguished from the immediate, incidence of every form of taxation. Smith had already dealt with this question; Ricardo develops and criticizes his results. The conclusions at which he arrives are in the main as follows: a tax on raw produce falls on the consumer, but will also diminish profits; a tax on rents on the landlord; taxes on houses will be divided between the occupier and the ground landlord; taxes on profits will be paid by the consumer, and taxes on wages by the capitalist.
In 1819 Ricardo, having retired from business and become a .landed proprietor, entered parliament as' member for Portarlington. He was at first diiiident and embarrassed in speaking, but gradually overcame these difficulties, and was heard with much attention and deference, especially when he addressed the House on economic questions. He probably contributed in a considerable degree to bringing about the change of opinion on the question of free trade which ultimately led to the legislation of Sir Robert Peel on that subject.
In 1820 he contributed to the supplement of the Encyclopaedia Britannica (6th ed.) an “ Essay on the Funding System.” In this besides giving an historical account (founded on Dr Robert Hamilton's valuable work On the National Debt, 1813, 3rd ed., 1818) of the several successive forms of the sinking fund, he urges that nations should defray their expenses, whether ordinary or extraordinary, at the time when they are incurred, instead -of providing for them by loans.
In 1822 he published a tract On Protection to Agriculture, which is an able application to controversy of the general principles laid down in his systematic work. Its arguments and conclusions are therefore subject to the same limitations which those fundamental principles require. In his Plan for the Establishment of a National Bank, published posthumously in 1824, he proposes that the issue of the paper currency- should be taken out of the hands of the Bank of England and vested in commissioners appointed by the government. The tract describes in detail the measures to be adopted for the introduction and working of the system. A certain step towards realizing the objects of his scheme, though on different lines from Ricardo's, was taken in Sir Robert Peel's act of 1844, by which the discount business of the bank was separated from the issue department. Ricardo died on the 11th of September 1823, at his seat (Gatcomb Park) in Gloucestershire, from a cerebral affection resulting from disease of the ear. James Mill, who was intimately acquainted with him, says (in a letter to Napier of November 1818) that he knew not a better man, and on the occasion of his death published a highly eulogistic notice of him in the Morning Chronicle. A lectureship on political economy, to exist forten years, was founded in commemoration of him, M'Culloch being chosen to fill it.
In forming a general judgment respecting Ricardo, we must have in view not so much the minor writings as the Principles, in which his economic system is expounded as a whole. By a study of this work we are led to the conclusion that he was an economist only, not at all a social philosopher in the wider sense, like Adam Smith or John Mill. He had great acuteness, but little breadth, For any large treatment of moral and political questions he seems to have been alike by nature and preparation unhtted; and there is no evidence of his having had any but the most ordinary and narrow views of the great social problems. He shows no trace of that hearty sympathy with the working classes which breaks out in several passages of the Wealth of Nations; we ought, perhaps, with field, to regard it as a merit in Ricardo that he do es not cover with fine phrases his, deficiency in Warmth of social sentiment. The idea of the active capitalist having any duties towarcm his employés never seems to occur to him; the labourer is, in fact, merely an instrument in the hands of the capitalist, a pawn in the game he plays.
He first introduced into economics on a great scale the method of deduction from a priori assumptions. The conclusions so arrived at have often been treated as if they were directly applicable to real life, and indeed to the economic phenomena of all times and places. But the truth of Ricardo's theorems is now by his warmest admirers admitted to be hypothetical only. Bagehot seems right in believing that Ricardo himself had no consciousness of the limitations to, which his doctrines are subject. Be this as it may, we now see that the only basis on which these doctrines could be allowed to stand as a permanent part of economic science is that on which they are placed by Roscher, namely, as a stage in the preparatory work of the economist, who, beginning with such abstractions, afterwards turns from them, not in practice merely, but in the completed theory, to real life and men, as they actually are or havegbeen.
The criticisms to which Ricardo's general economic scheme is open do not hold with respect to his treatment of the subjects of currency and banking. These form precisely that branch of economics into which moral ideas (beyond the plain prescriptions of honesty) can scarcely be said to enter, and where the operation of purely mercantile principles is most immediate and invariable. They were, besides, the departments of the study to which Ricardo's early training and practical habits led him to give special attention; and they have a lasting value independent of his systematic construction.
Ricardo's collected works were published, with a notice of his life and writings, by J. R. M'Culloch in 1846.
The Principles have been edited (with an introduction, bibliography and notes) by E. C. K. Gonner, 1891. See also Letters to H. Trower and Others, ed. J. Bonar and J. H. Hollander, 1899; Letters to J. R. M'Culloch, ed. J. H. Hollander, 1895; Letters to T. R. Malthus, ed. J. Bonar, 1887. A French translation of the Principles by Constancio, with notes by Say, appeared in 1818; the whole works, translated by Constancio and Fonteyraud, form vol. xiii. (1847) of the Collection des principaux économistes, where they are accompanied by the notes of Say, Malthus, Sismondi, Rossi, &c. The Principles was first “naturalized ” in Germany, says Roscher (though another version b Von Schmid had previously appeared), by Edward Baumstarl; in his David Ricardo's Grundgesetze der Volkswirthschaft ~ und der Besteuerung ubersetzt und erldutert (1837), which Roscher highl commends, not only for the excellence of the rendering, but for the value of the explanations and criticisms which are added.
RICASOLI, BETTINO, Baron (1809-1880), Italian statesman, was born at Broglio on the 19th of March 1809. Left an orphan at eighteen, with an estate heavily encumbered, he was, by special decree of the grand duke of Tuscany declared of age and
