Abstract
Britain suspended the gold standard in its war with France in 1797. This led to an inflation controversy that created Ricardo the economist. He entered the discussion in 1809 arguing that the inflation was caused by too much paper money. His impressive argument attracted the attention of James Mill and Thomas Malthus who both became life-long friends and correspondents. In its early days economics was unsettled with vague terms and loose reasoning. James Mill, impressed with Ricardo’s logical mind and brilliance, convinced him to write a book to settle the issues. It was during the writing of this book in 1816 that Ricardo discovered comparative advantage. I tell the story.
I have no other encouragement to pursue the study of Political Economy than the pleasure which the study itself affords me, for never shall I be so fortunate however correct my opinions may become as to produce a work which shall procure me fame and distinction (Ricardo, Vol. 6, p. 315).
David Ricardo to Hutches Trower, October 1815
My object was to elucidate principles, and to do this I imagined strong cases that I might shew the operation of those principles (Ricardo, Vol. 8, p. 184).
Ricardo to Malthus, May 1820
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Notes
- 1.
Mill (1808) and Torrens (1808). Thweatt (1976, p. 212) conveniently contains their statements.
- 2.
At least since the classic text book by Ellsworth (1938).
- 3.
In an early debate between Edwin Seligman and Jacob Hollander (1911, p. 457), Hollander misinterprets “thirty times the expense for which at least equally good can be brought from foreign countries” as 30 times the cost in Portugal.
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Ruffin, R.J. (2017). Mill and Ricardo: The Genesis of Comparative Advantage. In: Jones, R., Weder, R. (eds) 200 Years of Ricardian Trade Theory. Springer, Cham. https://doi.org/10.1007/978-3-319-60606-4_9
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