Blog 1: Memoir of an Economist
Hello and welcome to my blog! I am David Ricardo born April 18, 1772 in London of the Kingdom of
Great Britain. I am one of seventeen children in my Jewish family! We had to work hard from an early
age because after all feeding seventeen children is expensive. I started working with my father,
Abraham Ricardo, when I was 14 years old as a stock broker.
The future looked bright and I soon found the love of my life, Priscilla Wilkinson, and got married when
I was 21 years old. Youthful ignorance made me blind to the coming storm on the horizon.
My father did not approve of my decision because Priscilla was a Quaker. He quickly disowned me
from the family and my mother refused to speak with me. I said my farewells to my brothers and
sisters, at least to the ones that would listen, before setting out on my own path.
I began a business around trading government securities with the savings I had from working as a
stock broker. Over time, the business faced difficult financial situations but overall was successful
enough for me to amass considerable wealth. My biggest financial victory was speculating on the
outcome of who will win the Battle of Waterloo, the final battle of the Napoleonic Wars. I earned
somewhere around a million sterlings enough for me to retire to the countryside, Gatcombe Park to
be specific which is an estate in Gloucestershire. By this time I had reached the age of 42. Looking back, I am amazed at how the years have passed
by in a blur...one moment I am meeting Priscilla for the first time then I am married with children,
six of them in fact! Some nights I find myself unable to sleep because I am thinking about how my
children would be different if I had spent more time with them rather than working in my office or at
some dinner or party. The birthdays I have missed, the moments I could have been there for
support, the guidance I could have provided. Would David, my son, still become a member of
parliament or would he had become something else if I was more involved? Perhaps a poet?
Musician? Artist? I will never know as I had decided to prioritize my work instead even in retirement. I became a member of Parliament where I got into contact with James Mill, Jeremy Bentham, and
Thomas Malthus, a philosopher and economist with some very interesting ideas. I had developed
and published some ideas of my own. One interesting idea that I discuss in my book “On the Principles of Political Economy and Taxation”,
which is available at your closest bookstore or merchant, is the theory of Comparative Advantage.
The theory of Comparative Advantage argues that countries should specialize in producing goods in
which they have an absolute advantage but also a relative advantage over other countries in order to
promote the benefits of international trade. For example, a mutual trade benefit is possible between
Great Britain and France if Great Britain specializes in the production of tea and France specializing
in the production of wine and cheese. Another theory of mine is the Labor Theory of Value which states the value of a good could be
measured by the labor that it took to produce it. It is important to note that this means the price
paid for a good should not be based on the cost of labor to produce it. For example, five hours is
required to produce one desk meanwhile it takes two and a half hours to produce one drawer.
Regardless of wages, one desk is always worth two drawers.
Great Britain. I am one of seventeen children in my Jewish family! We had to work hard from an early
age because after all feeding seventeen children is expensive. I started working with my father,
Abraham Ricardo, when I was 14 years old as a stock broker.
The future looked bright and I soon found the love of my life, Priscilla Wilkinson, and got married when
I was 21 years old. Youthful ignorance made me blind to the coming storm on the horizon.
My father did not approve of my decision because Priscilla was a Quaker. He quickly disowned me
from the family and my mother refused to speak with me. I said my farewells to my brothers and
sisters, at least to the ones that would listen, before setting out on my own path.
I began a business around trading government securities with the savings I had from working as a
stock broker. Over time, the business faced difficult financial situations but overall was successful
enough for me to amass considerable wealth. My biggest financial victory was speculating on the
outcome of who will win the Battle of Waterloo, the final battle of the Napoleonic Wars. I earned
somewhere around a million sterlings enough for me to retire to the countryside, Gatcombe Park to
be specific which is an estate in Gloucestershire. By this time I had reached the age of 42. Looking back, I am amazed at how the years have passed
by in a blur...one moment I am meeting Priscilla for the first time then I am married with children,
six of them in fact! Some nights I find myself unable to sleep because I am thinking about how my
children would be different if I had spent more time with them rather than working in my office or at
some dinner or party. The birthdays I have missed, the moments I could have been there for
support, the guidance I could have provided. Would David, my son, still become a member of
parliament or would he had become something else if I was more involved? Perhaps a poet?
Musician? Artist? I will never know as I had decided to prioritize my work instead even in retirement. I became a member of Parliament where I got into contact with James Mill, Jeremy Bentham, and
Thomas Malthus, a philosopher and economist with some very interesting ideas. I had developed
and published some ideas of my own. One interesting idea that I discuss in my book “On the Principles of Political Economy and Taxation”,
which is available at your closest bookstore or merchant, is the theory of Comparative Advantage.
The theory of Comparative Advantage argues that countries should specialize in producing goods in
which they have an absolute advantage but also a relative advantage over other countries in order to
promote the benefits of international trade. For example, a mutual trade benefit is possible between
Great Britain and France if Great Britain specializes in the production of tea and France specializing
in the production of wine and cheese. Another theory of mine is the Labor Theory of Value which states the value of a good could be
measured by the labor that it took to produce it. It is important to note that this means the price
paid for a good should not be based on the cost of labor to produce it. For example, five hours is
required to produce one desk meanwhile it takes two and a half hours to produce one drawer.
Regardless of wages, one desk is always worth two drawers.
Interesting that you wrote this in the first person. In subsequent posts when you are asked to write in the first person, I hope it will be about you and not somebody else.
ReplyDeleteFor our class Ricardo is most important because he was the first economist to talk about economic rent - a payment to a factor of production in excess of what is needed to elicit its supply. (It is the difference between the payment and the amount needed to elicit supply that is the rent.) . Ricardo was afraid that landowners would get so much rent that is would such resources out of the economy and then entrepreneurs would not have they resources they need to invest properly in their businesses.
I wrote the blog in first person because I thought memoirs had to be written in the first person. I had learned about Ricardo in my first economics class in college that focused on many of the economic theorists. This was at my first college and UIUC is my third.
DeleteIt has been three years since I have taken that course so I only vaguely remember Ricardo's theories'. His theory on landlords receiving so much income from rent that resources in the economy begins to become scarce as a select few has most of the money jogs my memory a little bit but also is similar to modern times.