I.Ricardo's Starting-Point
David Ricardo,1born 19th April 1772,was the son of a Dutch Jew who had settled in England,and made money upon the Stock Exchange.Ricardo had a desultory education,and was employed in business from his boyhood.He abandoned his father's creed,and married an Englishwoman soon after reaching his majority.He set up for himself in business,and,at a time when financial transactions upon an unprecedented scale were giving great opportunities for speculators,he made a large fortune,and about 1814bought an estate at Gatcombe Park,Gloucestershire.He withdrew soon afterwards from business,and in 1819became member of parliament.His death on 11th September 1823cut short a political career from which his perhaps too sanguine friends anticipated great results.His influence in his own department of inquiry had been,meanwhile,of the greatest importance.He had shown in his youth some inclination for scientific pursuits;he established a laboratory,and became a member of scientific societies.The perusal of Adam Smith's Wealth of Nations in 1799gave him an interest in the application of scientific methods to the questions with which he was most conversant.Accepting Adam Smith as the leading authority,he proceeded to think out for himself certain doctrines,which appeared to him to have been insufficiently recognised by his teacher.
The first result of his speculations was a pamphlet published in 1809upon the depreciation of the currency.Upon that topic he spoke as an expert,and his main doctrines were accepted by the famous Bullion Committee.Ricardo thus became a recognised authority on one great set of problems of the highest immediate interest.Malthus's Inquiry into Rent suggested another pamphlet;and in 1817,encouraged by the warm pressure of his friend,James Mill,he published his chief book,the Principles of Political Economy and Taxation .This became the economic Bible of the Utilitarians.
The task of a commentator or interpreter is,for various reasons,a difficult one.
There is a certain analogy between Ricardo and a very different writer,Bishop Butler.Each of them produced a great effect by a short treatise,and in each case the book owed very little to the ordinary literary graces.Ricardo's want of literary training,or his natural difficulty of utterance,made his style still worse than Butler's;but,like Butler,he commands our respect by his obvious sincerity and earnestness.He is content when he has so expressed his argument that it can be seized by an attentive reader.He is incapable of,or indifferent to,clear and orderly exposition of principles.The logic is there,if you will take the trouble to look for it,Perhaps we ought to be flattered by this tacit reliance upon our patience,'You,'Ricardo,like Butler,seems to say to us,'are anxious for truth:you do not care for ornament,and may be trusted to work out the full application of my principles.'
In another respect the two are alike.Butler's argument has impressed many readers as a demolition of his own case.It provokes revolt instead of adhesion.Ricardo,an orthodox economist,laid down principles which were adopted by Socialists to upset his own assumptions.Such a God as you worship,said Butler's opponents,is an unjust being,and therefore worse than no God.Such a system as you describe,said Ricardo's opponents,is an embodiment of injustice,and therefore to be radically destroyed.Admitting the logic,the argument may be read as a reductio ad absurdum in both cases.
Ricardo has involved himself in certain special difficulties.In the first place,he presupposes familiarity with Adam Smith.The Principles is a running comment upon some of Smith's theories,and no attempt is made to reduce them to systematic order.
He starts by laying down propositions,the proof of which comes afterwards,and is then rather intimated than expressly given.He adopts the terminology which Smith had accepted from popular use,2and often applies it in a special significance,which is at least liable to be misunderstood by his readers,or forgotten by himself.It is difficult,again,to feel sure whether some of his statements are to be taken as positive assertions of fact,or merely as convenient assumptions for the purposes of his argument.
Ricardo himself,as appears in his letters,was painfully aware of his own awkwardness of expression,and upon that point alone all his critics seem to be in tolerable agreement.Happily,it will be enough for my purpose if I can lay down his essential premises without following him to the remoter deductions.
Ricardo's pamphlet upon Malthus (1815)gives a starting-point.Ricardo cordially adopts Malthus's theory of rent,but declares that it is fatal to some of Malthus's conclusions.
Malthus,we have seen,wished to regard rent as in some sense a gift of Providence --a positive blessing due to the fertility of the soil.Ricardo maintains,on the contrary,that 'the interest of the landlord is necessarily opposed to the interest of every other class in the community.'3The landlord is prosperous when corn is scarce and dear;all other persons when it is plentiful and cheap.This follows upon Malthus's own showing.