- Person
- David Ricardo
- Lived
- 1772–1823
- Field
- Economics and finance
- From
- British
The story
For centuries Britain had regulated and taxed the trade in grain. During the Napoleonic Wars a House of Commons committee recommended in 1813 that foreign corn be kept out until home-grown corn reached 80 shillings a quarter. When peace in 1815 brought prices down, the government of Lord Liverpool passed a new Corn Law to keep bread prices high, provoking serious rioting in London. David Ricardo, a wealthy stockbroker who had become a leading economist, became one of the laws' sharpest critics.
In February 1815, as Parliament debated the question for the third year running, he published his Essay on the Influence of a Low Price of Corn on the Profits of Stock, subtitled Shewing the Inexpediency of Restrictions on Importation. He argued that the tariffs forced Britain to farm poorer land, which drove up rents for landlords while raising the cost of food for everyone else. Higher food prices pushed up wages, cut profits and slowed investment and growth, and he believed landlords tended to spend their gains on luxuries rather than invest them. The free traders were defeated, and a restrictive Corn Law passed by a large majority.
Ricardo kept up the argument. In his Principles of Political Economy and Taxation of 1817 he set out the case for free trade, believing that it increased human well-being by making the goods of daily life more affordable, and he imagined Britain importing farm products in exchange for manufactured goods. As member of Parliament for Portarlington from 1819 he served on the Commons committees on agricultural distress in 1821 and 1822, and in his 1822 pamphlet Protection to Agriculture he proposed replacing the Corn Law step by step with free importation subject to a modest duty. The Commons rejected it. In Parliament he also voted against the sugar duties and opposed the timber duties.
Ricardo died in 1823 and did not see the outcome. Pressure grew through the 1840s, led by the Anti-Corn Law League, and the famine in Ireland made new food supplies urgent. In 1846 Prime Minister Sir Robert Peel achieved repeal, and Ricardo's nephew John Lewis Ricardo, MP for Stoke-upon-Trent, was among those advocating it. Ricardo's free trade views became public policy in Britain, and economic historians see the repeal as a decisive turn towards free trade.
Why it matters
Repeal of the Corn Laws lowered the cost of bread for working families, and Ricardo's arguments shaped the case for open trade for generations.
About David Ricardo
Sephardic stockbroker’s son who made a fortune in the City, then founded classical economics, the theory of comparative advantage, rent and money behind the case for free trade.
More about David Ricardo
- David Ricardo called slavery a stain on BritainDavid Ricardo was an abolitionist. In March 1823 he told a meeting of the East India Company’s Court that he regarded slavery as a stain on the nation’s character.
- David Ricardo voted to end the death penalty for forgeryAs an MP, David Ricardo voted in 1821 to abolish the death penalty for forgery, backed criminal law reform and sought an inquiry into the Peterloo Massacre.
- David Ricardo admitted machines could hurt workersIn 1821 David Ricardo added a chapter “On Machinery” to his Principles, openly changing his mind and accepting that machines could harm workers’ interests.
- David Ricardo proved that trade can benefit every nationIn his 1817 Principles, David Ricardo introduced comparative advantage, showing that two countries gain from trade even if one is better at producing everything.
- David Ricardo warned against issuing too much moneyIn 1810 David Ricardo published The High Price of Bullion, arguing that the Bank of England’s excessive note issue had caused banknotes to lose value.
- David Ricardo’s theory of rent inspired later reformersDavid Ricardo explained economic rent as the extra return from better land, an idea that inspired Henry George’s 1879 classic Progress and Poverty.
- David Ricardo backed reform of Parliament and the ballotDavid Ricardo used his seat in Parliament to support parliamentary reform and the secret ballot, speaking for reform at a Westminster dinner in 1822.
- David Ricardo proposed an independent central bankIn his Plan for the Establishment of a National Bank, published in 1824, David Ricardo argued that money should be issued by an independent public body.
Sources
- David Ricardo Wikipedia
- Ricardo, David (1772–1823) Keir Armstrong, Carleton University (from The New Palgrave)
- Corn Laws Wikipedia
Another act of tikkun olam. This is part of tikkun olam, the Jewish idea of repairing the world, and every one of us can add to it.