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David Ricardo Quotes

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About David Ricardo

David Ricardo (1772-1823) was a seminal figure in classical economics, renowned for his groundbreaking work on international trade theory, comparative advantage, and the labor theory of value. Born on July 26, 1772, in London, England, he was of Portuguese Jewish descent but converted to Anglicanism as an adult. After a brief stint at university, Ricardo self-taught himself economics through extensive reading and practical experience in commodity markets. In 1795, Ricardo ventured into the stockbroker business, which would provide him with firsthand insights into economic matters. During this period, he met and befriended prominent economists like Thomas Malthus and James Mill, who significantly influenced his intellectual development. In 1809, after a series of personal losses that included the death of his wife and business reverses, Ricardo retreated to his country estate and dedicated himself full-time to economic studies. Ricardo's most celebrated work is "On the Principles of Political Economy and Taxation," first published in 1817. This treatise expanded upon Adam Smith's theories of free markets, labor theory of value, and introduced his seminal concept of comparative advantage. Ricardo believed that it was more efficient for countries to specialize in producing goods where they had a lower opportunity cost rather than attempting to produce everything domestically. Ricardo also made critical contributions to the understanding of rent and profits in his work on differential rent, arguing that landlords could only earn income by owning more land than was needed for subsistence farming. His work significantly shaped the development of modern economics, providing a foundational framework for much of neoclassical economics and ongoing discussions about international trade, labor markets, and resource allocation. David Ricardo passed away on September 11, 1823.

Interpretations of Popular Quotes

"The rent of land, therefore, is a compensation to the owner of capital for the use of his capital."

This quote by economist David Ricardo suggests that in a market economy, the payment (or "rent") received for the use of land is a form of income, equivalent to interest or profit. It's a return on the capital invested in land, similar to how an investor earns returns from their capital employed in other productive activities. The implication is that landowners, like any other capital providers, are compensated for their contribution to economic growth and development by allowing others to use their land resources.

"Labour is paid its wages only in proportion as it creates wealth."

This quote by David Ricardo emphasizes that workers' wages are directly linked to the value or wealth they produce. In other words, a worker earns pay only if their work contributes to the creation of goods or services that have economic value. This principle is fundamental in classical economics and highlights the importance of productivity and the role of labor in generating wealth within an economy.

"The natural and effectual wage for labour is the price of the commodities necessary for the preservation of the labourer, and his family."

This quote by David Ricardo suggests that the fair or intrinsic wage for labor should be sufficient to cover the cost of the essential goods required for a worker and their family to live, i.e., the necessities needed for survival and reproduction. In other words, workers deserve compensation that allows them to maintain their livelihoods without falling into poverty or hardship.

"If the corn which is consumed in London was raised in Suffolk, the profits of the farmers in both places would be equalized."

This quote by David Ricardo, a British economist, highlights the principle of "Comparative Advantage" - a fundamental concept in international trade theory. In simpler terms, Ricardo suggests that if two regions (in this case, Suffolk and London) specialize in producing what they are relatively better at, rather than trying to produce everything for themselves, both can potentially benefit from trade. By focusing on the production of corn in Suffolk, where it has a comparative advantage, and other goods in London, they can improve their respective profit levels. The principle extends beyond agriculture and geographical regions, applying to any two entities that engage in trade.

"The quantity of labour necessary to produce the food, clothing, and housing destined for one person will always be equivalent to the food, clothing, and housing which that person's labour can produce."

This quote by David Ricardo is a fundamental principle in economics known as "Labour Theory of Value." It suggests that the value of goods or services is directly proportional to the amount of labor required to produce them. In simpler terms, it means that the time, effort, and skill invested in creating an item determine its worth. This theory forms a basis for understanding the functioning of market economies where trade occurs based on the relative values of different commodities produced by comparable amounts of labor.

Gold and silver, like other commodities, have an intrinsic value, which is not arbitrary, but is dependent on their scarcity, the quantity of labour bestowed in procuring them, and the value of the capital employed in the mines which produce them.

- David Ricardo

Finance, Other, Which, Scarcity

A rise of wages from this cause will, indeed, be invariably accompanied by a rise in the price of commodities; but in such cases, it will be found that labour and all commodities have not varied in regard to each other, and that the variation has been confined to money.

- David Ricardo

Other, Been, Confined, Cases

After all the fertile land in the immediate neighbourhood of the first settlers were cultivated, if capital and population increased, more food would be required, and it could only be procured from land not so advantageously situated.

- David Ricardo

Capital, Increased, Required, Cultivated

Again two manufacturers may employ the same amount of fixed, and the same amount of circulating capital; but the durability of their fixed capitals may be very unequal.

- David Ricardo

Very, Employ, Amount, Manufacturers

If the demand for home commodities should be diminished, because of the fall of rent on the part of the landlords, it will be increased in a far greater degree by the increased opulence of the commercial classes.

- David Ricardo

Will, Commercial, Increased, Opulence

If a commodity were in no way useful, - in other words, if it could in no way contribute to our gratification, - it would be destitute of exchangeable value, however scarce it might be, or whatever quantity of labour might be necessary to procure it.

- David Ricardo

Other, However, Commodity, In Other Words

A rise in wages, from an alteration in the value of money, produces a general effect on price, and for that reason it produces no real effect whatever on profits.

- David Ricardo

Reason, Real, Profits, Alteration

In stating the principles which regulate exchangeable value and price, we should carefully distinguish between those variations which belong to the commodity itself, and those which are occasioned by a variation in the medium in which value is estimated, or price expressed.

- David Ricardo

Which, Commodity, Stating, Variations

Gold and silver are no doubt subject to fluctuations, from the discovery of new and more abundant mines; but such discoveries are rare, and their effects, though powerful, are limited to periods of comparatively short duration.

- David Ricardo

Gold, Subject, Comparatively, Duration

It is not by the absolute quantity of produce obtained by either class, that we can correctly judge of the rate of profit, rent, and wages, but by the quantity of labour required to obtain that produce.

- David Ricardo

Quantity, Rent, Obtain, Profit

If we were left to ourselves, unfettered by legislative enactments, we should gradually withdraw our capital from the cultivation of such lands, and import the produce which is at present raised upon them.

- David Ricardo

Capital, Which, Import, Legislative

In comparing therefore the value of the same commodity, at different periods of time, the consideration of the comparative skill and intensity of labour, required for that particular commodity, needs scarcely to be attended to, as it operates equally at both periods.

- David Ricardo

Needs, Attended, Commodity, Comparative

The proportions, too, in which the capital that is to support labour, and the capital that is invested in tools, machinery and buildings, may be variously combined.

- David Ricardo

May, Capital, Which, Proportions

Gold, on the contrary, though of little use compared with air or water, will exchange for a great quantity of other goods.

- David Ricardo

Quantity, Other, Though, On The Contrary

By far the greatest part of those goods which are the objects of desire, are procured by labour; and they may be multiplied, not in one country alone, but in many, almost without any assignable limit, if we are disposed to bestow the labour necessary to obtain them.

- David Ricardo

Country, Part, Almost, One Country

During the period of capital moving from one employment to another, the profits on that to which capital is flowing will be relatively high, but will continue so no longer than till the requisite capital is obtained.

- David Ricardo

Which, Profits, Period, Requisite

But a rise in the wages of labour would not equally affect commodities produced with machinery quickly consumed, and commodities produced with machinery slowly consumed.

- David Ricardo

Wages, Consumed, Would, Produced

The exchangeable value of all commodities, rises as the difficulties of their production increase.

- David Ricardo

Difficulties, Production, Rises

If then the prosperity of the commercial classes, will most certainly lead to accumulation of capital, and the encouragement of productive industry; these can by no means be so surely obtained as by a fall in the price of corn.

- David Ricardo

Certainly, Means, Surely, Obtained

Whenever, then, the usual and ordinary rate of the profits of agricultural stock, and all the outgoings belonging to the cultivation of land, are together equal to the value of the whole produce, there can be no rent.

- David Ricardo

Ordinary, Profits, Usual, Stock

The facility of obtaining food is beneficial in two ways to the owners of capital, it at the same time raises profits and increases the amount of consumable commodities.

- David Ricardo

Capital, Profits, Amount, Raises

The rise or fall of wages is common to all states of society, whether it be the stationary, the advancing, or the retrograde state.

- David Ricardo

Society, Fall, Wages, Advancing

Profits might also increase, because improvements might take place in agriculture, or in the implements of husbandry, which would augment the produce with the same cost of production.

- David Ricardo

Cost, Which, Profits, Increase

If the quantity of labour realized in commodities, regulate their exchangeable value, every increase of the quantity of labour must augment the value of that commodity on which it is exercised, as every diminution must lower it.

- David Ricardo

Quantity, Which, Commodity, Increase

There can be no rise in the value of labour without a fall of profits.

- David Ricardo

Finance, Fall, Profits, Rise

In the same manner if any nation wasted part of its wealth, or lost part of its trade, it could not retain the same quantity of circulating medium which it before possessed.

- David Ricardo

Wealth, Quantity, Which, Medium

As the revenue of the farmer is realized in raw produce, or in the value of raw produce, he is interested, as well as the landlord, in its high exchangeable value, but a low price of produce may be compensated to him by a great additional quantity.

- David Ricardo

Quantity, May, Landlord, Raw

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