On the Principles of Political Economy and Taxation

Synopsis

The works of the English political economist David Ricardo (1772-1823), and particularly his most important work, The Principles of Political Economy and Taxation, lie at the heart of the laissez faire school of economics, preceded by Adam Smith and followed by John Stuart Mill. Economic growth, economic freedom - free trade rather than mercantilism, or controlled trade - was the fundamental attitude. Having been disowned by his Sephardic Jewish family for marrying outside the faith at the age of 21, Ricardo went on to make his own fortune, notably gaining ‘a million sterling’ by speculating on the outcome of the Battle of Waterloo. But it was with The Principles of Political Economy and Taxation (1817, revised 1821) that he placed his name in the history of economics. He expanded Smith’s ideas on the ‘labour theory of value’ and the theory of distribution. In the first, Ricardo argued that competitive market conditions linked the value or price of goods to the labour costs of producing them. In the second, he said that national product emerged from three social classes: wages for labourers, profits for owners of capital, and rents for landlords and that a benefit for one incurred a loss for another. Underpinning all this is his insistence that free trade, rather than protectionism - allowing international and domestic markets to operate without controls - was ultimately beneficial to all, though changing conditions result in occasional fluctuations. His work proved of lasting influence through Karl Marx and down to the present day. This recording, clearly read by Matthew Lloyd Davies, uses the final 1821 text.