Empirical methods Prescriptive and policy David Ricardo (18 April 1772 – 11 September 1823) was a British political economist, politician, and member of Parliament.

He was friends with prominent figures like James Mill, Jeremy Bentham, and Thomas Malthus, engaging in debates over various topics.

Born in London, England, Ricardo was the third surviving of the 17 children of successful stockbroker Abraham Israel Ricardo (1733?–1812) and Abigail (1753–1801), daughter of Abraham Delvalle (also "del Valle"), of a respectable Sephardic Jewish family that had been settled in England for three generations as "small but prosperous" tobacco and snuff merchants, and had obtained British citizenship.

A popular story states that he made his fortune as a result of speculation on the outcome of the Battle of Waterloo: in Ricardo's obituary, published on 14 September 1823,The Sunday Times reported that during the battle Ricardo "netted upwards of a million sterling", a huge sum at the time, and this was later popularised by the economist Paul Samuelson.

In reality, Ricardo was already very rich, and in June 1815, sold his latest government stock before the result of the battle was known in London, missing half of the rise.

Other notable friends included Jeremy Bentham and Thomas Malthus, with whom Ricardo had a considerable debate (in correspondence) over such things as the role of landowners in a society.

As MP for Portarlington, Ricardo voted with the opposition in support of liberal political movements in Naples and Sicily, and for inquiry into the administration of justice in Tobago.

He divided for (voted for) repeal of the Blasphemous and Seditious Libels Act; then for inquiry into the Peterloo massacre; and, in 1821, for abolition of the death penalty for forgery.

For David Ricardo, free trade was ever the answer; he envisioned Britain as importing agriculture products in exchange for exporting manufactured goods.

[17] Of David Ricardo, his friend John Louis Mallett commented: " … he meets you upon every subject that he has studied with a mind made up, and opinions in the nature of mathematical truths.

[19][20] He was also an abolitionist, speaking at a meeting of the Court of the East India Company in March 1823, where he said he regarded slavery as a stain on the character of the nation.

Ricardo advocated for the productive powers of labour to be held in high concern as the most influential of devices that played a role in the progression of the American Economy along with others.

In addition, Ricardo made notable advancements in the concept build involving reactions in the open market when considering banking altercations, stock investments, or other considerable impacting events.

In light of such diminishing surplus landowners see opportunities to charge rent as a means to compensate for the loss of returns on output.

[32]: 45  In studying rents, for example, Ricardo experiments numerically to determine the relative share of profit accruing to land owner, capital holder and laborers through what Morgan calls 'numerical model farming'.

In his numerical and verbal accounts Ricardo tests different improvements in capital, technology or labour to increase the yield of a farm, paralleling actual experiments run by his contemporaries such as "Turnip" Townshend.

[35] "In spite of the fact that the Portuguese could produce both cloth and wine with less amount of labour, Ricardo suggested that both countries would benefit from trade with each other".

[40] The new interpretation affords a totally new reading of Ricardo's Principles of Political Economy and Taxation with regards to trade theory, although it does not change the mathematics of optimal resource allocation.

He believed that the British "Corn Laws"—imposing tariffs on agricultural products—ensured that less-productive domestic land would be cultivated and rents would be driven up (Case & Fair 1999, pp.

[46] Ricardo recognized that applying his theory in situations where capital was mobile would result in offshoring, and thereby economic decline and job loss.

To correct for this, he argued that (i) "most men of property [will be] satisfied with a low rate of profits in their own country, rather than seek[ing] a more advantageous employment for their wealth in foreign nations", and (ii) capital was functionally immobile.

As Joan Robinson pointed out, following the opening of free trade with England, Portugal endured centuries of economic underdevelopment: "the imposition of free trade on Portugal killed off a promising textile industry and left her with a slow-growing export market for wine, while for England, exports of cotton cloth led to accumulation, mechanisation and the whole spiralling growth of the industrial revolution".

[48] The development economist Ha-Joon Chang challenges the argument that free trade benefits every country: Ricardo’s theory is absolutely right—within its narrow confines.

[49] Another idea associated with Ricardo is Ricardian equivalence, an argument suggesting that in some circumstances a government's choice of how to pay for its spending (i.e., whether to use tax revenue or issue debt and run a deficit) might have no effect on the economy.

[50] Despite his laissez-faire capitalist views, Ricardo's writings fascinated a number of early socialists in the 1820s, who thought his value theory had radical implications.

In the preface to the fourth edition he wrote: "What I have done in this book, if I have correctly solved the great problem I have sought to investigate, is, to unite the truth perceived by the school of Smith and Ricardo to the truth perceived by the school of Proudhon and Lasalle; to show that laissez faire (in its full true meaning) opens the way to a realization of the noble dreams of socialism; to identify social law with moral law, and to disprove ideas which in the minds of many cloud grand and elevating perceptions.

Major contributors to this school include Luigi Pasinetti (1930–2023), Pierangelo Garegnani (1930–2011), Ian Steedman (1941–), Geoffrey Harcourt (1931–2021), Heinz Kurz (1946–), Neri Salvadori (1951–), Pier Paolo Saviotti (–) among others.

They have criticised neoclassical international trade theory, namely the Heckscher–Ohlin model on the basis that the notion of capital as primary factor has no method of measuring it before the determination of profit rate (thus trapped in a logical vicious circle).

[57] Depoortère and Ravix judge that neo-Ricardian contribution failed without giving effective impact on neoclassical trade theory, because it could not offer "a genuine alternative approach from a classical point of view.

[72] Ricardo's publications included: His works and writings were collected in Sraffa, Piero; Dobb, Maurice Herbert, eds.