David Ricardo, Father of Classical Economics (1772-1823). The brilliant British economist David Ricardo was one the most important figures in the development of economic theory. He articulated and rigorously formulated the “Classical” system of political economy. The legacy of Ricardo dominated economic thinking throughout the 19th Century.
David Ricardo’s family was descended from Iberian Jews who had fled to Holland during a wave of persecutions in the early 18th Century. His father, a stockbroker, emigrated to England shortly before Ricardo’s birth in 1772. David Ricardo was his third son (out of seventeen!).
At the age of fourteen, after a brief schooling in Holland, Ricardo’s father employed him full-time at the London Stock Exchange, where he quickly acquired a knack for the trade. At 21, Ricardo broke with his family and his orthodox Jewish faith when he decided to marry a Quaker. However, with the assistance of acquaintances and on the strength of his already considerable reputation in the City of London, Ricardo managed to set up his own business as a dealer in government securities. He became immensely rich in a very short while. In 1814, at the age of 41, finding himself “sufficiently rich to satisfy all my desires and the reasonable desires of all those about me” (Letter to Mill, 1815), Ricardo retired from city business, bought the estate of Gatcomb Park and set himself up as a country gentleman.
Egged on by his good friend James Mill, Ricardo got himself elected into the British parliament in 1819 as an independent representing a borough in Ireland, which he served up to his death in 1823. In parliament, he was primarily interested in the currency and commercial questions of the day, such as the repayment of public debt, capital taxation and the repeal of the Corn Laws. (cf. Thomas Moore’s poems on Cash, Corn and Catholics)
Ricardo’s interest in economics was sparked by a chance reading of Adam Smith’s Wealth of Nations (1776) when he was in his late twenties. Bright and talkative, Ricardo discussed his own economic ideas with his friends, notably James Mill. But it was only after the persistent urging of the eager Mill that Ricardo actually decided to write them down. He began in 1809, authoring newspaper articles on currency questions which drew him into the great Bullionist Controversy that was raging at the time In that affair, he was a partisan of the Bullionist position, which argued for the resumption of the convertibility of paper money into gold. He wrote a pair of tracts (1810, 1811) articulating their arguments and outlining what has since become known as the “classical approach” to the theory of money.