This volume is a collection of personal correspondence and first-person recollections that focus on Ricardo's life outside of his political economic endeavors. These missives concern the aspects of Ricardo's life that surround his character, his amiable and generous nature, his successful business dealings, and his personal relationships.
It includes a memoir written by one of his brothers that sheds light about his family, his formative youth, and his education. There are chapters on his entrance into the stock market as a mere teenager and records of his meteoric climb within the financial community to an extremely successful station.
This volume, without pretensions to be a complete biography, is composed of materials which bear upon Ricardo’s life and character. It opens with a Memoir written by one of his brothers and to this has been attached, under the title of Addenda, some new information that has come to light about the patriarchal family into which he was born and about his youth and education until the final breach with his parents. There follow chapters on his business activity as a stock-jobber and loan-contractor, and on how he invested the fortune which he had made. Finally, a series of letters of a domestic character show Ricardo in a variety of moods and circumstances. The whole forms a sort of scrap-book illustrating those aspects and periods of his life which are not represented in the previous volumes.
While the selection of private letters has none of the unity of the economic correspondence, it can be claimed that the selecting was largely done by Ricardo himself, in that they cover all the occasions on which he saw fit to keep, besides his correspondents’ letters, also a copy of his own. Of the other private letters which have been included, those to his brother-in-law J. H. Wilkinson are notable for antedating by fifteen years any letters of Ricardo that have hitherto been known. The Journal of a Tour on the Continent in 1822, which had previously been printed only for private circulation and with excisions, is now published in full.
Thanks are due once more to the late Lt.-Col. H. G. Ricardo and to Mr Frank Ricardo, and also to Canon Horace Ricardo Wilkinson and to Mr Peter W. Ricardo, for their help in tracing the history of the family and for making available manuscripts and documents in their possession. Access to the records of the Bank of England has been made possible through the courtesy of Professor O. M. W. Sprague, when he was Economic Adviser to the Bank, and of Mr Humphrey Mynors, the present Deputy-Governor. Similarly, with respect to the records of the Stock Exchange, acknowledgement is due to Mr A. L. F. Green, late secretary of the Committee for General Purposes. Sir John Murray has kindly supplied information from the records of his publishing house, and the late Professor H. E. Butler from the papers of Maria Edgeworth. Great help in exploring the ancestry of Ricardo has been received from Mr Wilfred S. Samuel, from Mr Edgar R. Samuel and above all from the late Mr J. N. Nabarro. Finally the editor must thank Mrs Barbara Lowe for assistance in annotating the Journal, Dr Eduard Rosenbaum for research in Holland and Miss Ellen H. Green for enquiries into Ricardo’s connection with the Unitarian Chapel at Hackney.
David Ricardo (1772-1823) was an English political economist, often credited with systematising economics, and was one of the most influential of the classical economists, along with Thomas Malthus, Adam Smith, and John Stuart Mill.
Ricardo’s father, a successful stockbroker, introduced him to the Stock Exchange at the formative age of fourteen. During his career in finance, he amassed a personal fortune, which allowed him to retire at the age of forty-two. Thereafter, he pursued a political career and further developed his economic ideas and policy proposals. A man of very little formal education, Ricardo arguably became, with the exception of Adam Smith, the most influential political economist of all time.
Ricardo was the first economist to make extensive use of deductive reasoning and arithmetical models to illustrate the anticipated reactions to juxtaposed market forces and responsive human action. His modes of analysis have become identified with economics as an academic discipline.
Like Smith, Ricardo believed that minimal government intervention best served an economy. His contributions to economics are numerous and include the theory of “hard money” to hedge inflation, the law of diminishing returns, developed along with his close friend the classical economist T. R. Malthus, and the labor theory of value.
One of Ricardo’s most significant contributions to economics is the law of comparative advantage as applied to international commerce, which grew out of Adam Smith’s division of labor and has become the central argument for free trade and open markets. It implies that countries best serve themselves when they trade with other countries abiding by their respective scales of efficiency. Besides being the most efficient method of international commerce, the comparative-advantage mode of trade also encourages international stability through multilateral business interests and global interdependencies. As Frédéric Bastiat, the French journalist and politician, wrote, “If goods do not cross borders, armies will.”
Throughout the years, several economists have elaborated on fundamental Ricardo themes and developed compelling theorems. Using Ricardo’s assertions about the interrelationships among capital, labor, output, and investment, the Nobel laureate F. A. Hayek posed the Ricardo effect, a retort to John Maynard Keynes’s accelerator principle. Robert Barro of Harvard University used Ricardo’s equivalence theorem to argue that the distinction between government taxing its citizens or deficit spending on credit is inconsequential to the long-term aggregate economy. Gordon Tullock, one of the founders of the public choice school, built upon Ricardo’s rent theory to explain his “rent-seeking” phenomenon, which illuminates the inequitable and monopolistic distribution of excessive gains derived through discriminate government subsidies.