1ST SLIDE:

WHO IS DAVID RICARDO?

- born April 18, 1772, died September 11, 1823
- was born in London, the third of seventeen children of a Jewish immigrant stockbroker.
- English economist who gave systematized, classical form to the
rising science of economics in the 19th century.
- His first published work was The High Price of Bullion, a Proof of the Depreciation of
Bank Notes (1810),

2ND SLIDE:
• Best known for his theories of comparative advantage, economic rents, and the labor
theory of value and his 1817 book, "Principles of Political Economy and Taxation"
• Held company with other influential economists of the time including Thomas Malthus and
James Mill.
• Was a member of the Parliament of Great Britain and Ireland
He founded his analysis on three fundamental ideas that he borrowed from other writers: (1)
classical rent theory, (2) Malthus's population principle, and (3) the wages-fund doctrine.

3RD SLIDE:
THE CLASSICAL DOCTRINE OF LAND RENT
4TH SLIDE:
The theory of rent played a pivotal role in the development of classical macroeconomics.
Ricardo regarded rent as value in excess of real production-something caused by incident of
ownership rather than by fundamental economic value imparted by free and equal trade.
5TH SLIDE:
James Anderson (1739-1808)
- a Scottish farmer and inventor
- The first tract on land rent that could be called "classical" in the sense used here was
written.
- ln 1777, Anderson published a pamphlet that clearly stated in embryonic form the
principle of diminishing returns.
6TH SLIDE:
Napoleonic Wars
- Napoleon's embargo on British ports effectively kept foreign grain out of England,
forcing British farmers to increase production of domestic grain in order to feed the
population.
- Between 1790 and 1810, British comprises rose 18 percent per year on average.
- Parliament accommodated the landlords by passing protective legislation in the form of
the Corn Laws of 1815 (These laws placed tariffs on cereal grain imported from other
countries such as wheat and maize to favour domestic agriculture)
Thomas Malthus, in full Thomas Robert Malthus, (born February 13, 1766, Rookery, near
Dorking, Surrey, England—died December 29, 1834, St. Catherine, near Bath, Somerset),
English economist and demographer who is best known for his theory that population growth
will always tend to outrun the food supply and that betterment of humankind is impossible
without stern limits on reproduction. This thinking is commonly referred to as
Malthusianism.
Malthus defined land rent as "that portion of the value of the whole produce which remains to the
owner of land, after all the outgoings (i.e., costs] belonging to its cultivation, of whatever kind,
have been paid, including the profits of the capital employed, estimated according to the usual
and ordinary rate of the profits of agricultural stock at the time being.”
The price of produce in every progressive country must be just about equal to the cost of
production on land of the poorest quality actually in use; or to the cost of raising additional
produce on old land, which yields only the usual returns of agricultural stock with little or no
rent.

Ricardo was more explicit about this critical point. Describing land rent as Ricardo defined rent
as, “that portion of the produce of the earth which is paid to the landlord for the use of the
original and indestructible powers of the soil.”