The Principles of Political Economy and Taxation

This principle I was taught is the basis of advocacy for free trade.This is before Ludwig von Mises birthed the Austrian school of economics and their obsession with inflation.David Ezrin "Heracles" Hans Riccardo "Ulmo"When naming gentry correctly, put the first name, then the feudal title.

Good!

The greatest strength of Ricardo's famous text may be that nearly every chapter addresses an issue which has remained at the center of controversy for centuries since. Whether refuting ideas of other authors popular at his time (Say, Smith, Malthus...etc.) or furthering his own original ideas, Ricardo continues to surprise you with his ability to think logically and abstractly.Ricardo unfortunately starts the book with his theory on value, which extends Adam Smith's labor-based theory and sets the stage for Marx's use of the labor theory of value. A century and a half after the marginal revolution, this discussion seems especially misguided. Ricardo's views on value are constantly returned to throughout the book. However, also throughout the book is a seemingly strong understanding of the effect of supply and demand on prices. So for awhile it's difficult to reconcile these conflicting ideas. However, in the later chapter on the influences of supply and demand on prices, Ricardo seems to agree that supply and demand (and not the quantity of labor required) sets prices in industries that are monopolized only, but feels this does not apply to most industries. Thus, Ricardo's mistake may really have been his view of all industry as purely competitive, which was far more relevant when agriculture (the textbook example of pure competition) was the most popular industry...basically foreshadowing the neoclassical industry lens incorporating monopolistic competition and oligopoly as competitive structures. Even further, the very last sentence of the book states that value in use is subjective and different for every single person.The next major portion of this book is Ricardo's theory of rents. His view is that an increasing supply of fertile land (though of less quality) will raise rents of higher quality land. As more food is needed, more land must be cultivated, but this land will be less fertile than previously cultivated land. The lowest quality land will produce zero rent, and the rent of all better land reflects the differential in fertility, with the most fertile land producing the highest rent. This will seem plausible as the book goes on, but appears to suffer from same criticism as the idea that interest rates are set by the productivity of capital. If increasing demand for food (from population growth) leads to less fertile land being employed, it will only be the result of increasing crop prices driving the price of all fertile lands up. As rents are generally a percentage of price, rents will go up in an absolute sense even if the percentage rent is unchanged (with the percentage rent impacted by the separate market of farmers seeking to rent land). He believes the lowest quality land not to generate any rent, though of course this can only occur if landowner and farmer are one in the same person (otherwise the land won't be lent for cultivation).When it comes to trade, Ricardo's theory of comparative advantage is well-known and still a focal point of policy-setting today. Criticisms of comparative advantage, namely that of capital mobility, actually date back to Ricardo himself (in this work). After explaining absolute and comparative advantage, Ricardo also explains that the ability to move production will make comparative advantage from free trade inapplicable. His rebuttal is basically that capital is difficult to move (no longer the case) and that over time wages and capital returns will balance across geographies. However, he admits that trade barriers may be favorable to certain domestic industries, and also that distress will be felt as comparative advantages change (as he says they often do). He further ingeniously explains how trade agreements with specific countries will be harmful only, as domestic producers will gain no extraordinary advantage since they must still compete with eachother, but unless the selected trade partner is the best producer of that good globally all consumers will pay a higher price.Another highly relevant section is his take on machinery. Ricardo clearly states that the replacement of labor with machinery will improve the lives of all consumers, though will obviously burden lower-skilled laborers who will be less favorably re-employed. However, he believes this is ok because technological innovation tends to primarily redirect newly accumulated capital and not existing capital. He also explains how allowing machinery to be continually incorporated into production will help even displaced laborers over time as long as it results in higher gross and net produces, and not just higher net produces. He thinks it possible for gross produce to fall after technological innovation since companies may pull back production since expenses will fall (so higher net produce but lower gross), which is an inconsistent position when reconciling with his view of industries as purely competitive with prices always reverting to cost of production. In reality, firms will only reduce gross production if they have monopolized an industry (to raise price), meaning gross produce is likely to increase with technological innovation as long as industries are competitive.Other interesting sections include his discussion of currency and banking, where he states that profits direct the height of interest and that an independent institution to manage the money supply would be ok (central bank); and his portion on value vs. wealth, basically expounding on the water/diamond conundrum and explaining that wealth can increase as products increase in availability but that value will move in the opposite direction. He also covers how taxation at different stages of production can have a compounding impact on cost to the end consumer. The most popular theories from Ricardo in this work include comparative advantage, diminishing returns, the wages fund theory and the "iron law of wages" (really Malthus's theory), and his theory of rent.Overall, despite antiquated views particularly on value, rent, and interest, Ricardo clearly sparked several schools of thought and was a golden link in the econ chain.

This is an early work in economics (1817) that is strongly influenced by Mill and Malthus. In some respects, it is difficult to even engage the arguments Ricardo puts forward, because events have proven Malthus (the basis of Ricardo’s study) wrong.Throughout the book, Ricardo continually overlooks the demand side of the equation, ignoring the role that fashion, simplicity, useability, and status play on the price of goods. I think Ricardo tries to differentiate *value* from *price* by zeroing out the demand side of the equation (21).Ricardo is untestable now, since central banking has eliminated a freely functioning market. A return to the gold standard may show him absolutely correct on commodity pricing (29), but I suspect I will not live to see it. It is just possible that restoring some parity in foreign trade agreements will show Ricardo is right about political stability’s influence on exchange rates (93).The book is valuable for its brief, profound introduction. On taxes, Ricardo posits that every new tax becomes a discouragement to production 118 (in Ricardo’s view, “production” applies only to minerals and harvests). Taxes produce an unavoidable disadvantage for the nation that relies on higher taxes to fund its operations. This calls back to the French economist Say, and Ricardo actually quotes him on page 159: “The very best of all plans of finance is to spend little, and the best of all taxes is that which is in the least amount.”

David Ricardo played a crucial role in developing Classical Economics. Ricardo was prompted to write on economics by reading The Wealth of Nations. As luck would have it, Ricardo knew James Mill (father of JS Mill) and was soon in contact with TR Malthus. The debates between Ricardo and Malthus produced a paradigm that lasted only a half a century. PPE+T is a central part of the Classical paradigm, it is Ricardo's definitive statement on economics.PPE+T is perhaps the most tightly reasoned book written by a Classical economists (JS Mill is a close rival here). This is not fun reading but it is important as a piece of history, and elements of Ricardo's analysis remain relevant today. Given Ricardo's razor sharp intellect, one must wonder why he did not develop modern value theory himself. The tight reasoning of this book is, ironically, the source of much criticism against it. Joseph Schumpeter (among others) has lamented `the Ricardian vice', by which Ricardo arrived at policy conclusions through flawless but restrictive logical reasoning. Ricardo is hard to argue against, given his assumptions, but what if we alter these assumptions?While Classical Economics is dead, some of its Ricardian elements live on. The Principles of Political Economy and Taxation remains relevant today largely because of Ricardo's concept of Comparative Advantage. Comparative Advantage is one of the most enduring ideas in economics. The development of the Comparative Advantage concept set Ricardo ahead of all but a few of his contemporaries. Economists still speak of Ricardian Equivalence and The Ricardo Effect. While some might object Ricardo's logical-deductive approach to political economy, few economists have stood the test of time so well. PPE+T is a timeless classic. This is not fun reading, but it is important none the less.

El libro de tapa dura tiene un tamaño considerable, sin embargo, está lleno de escaneos de calidad inferior que, sorprendentemente, son mucho más pequeños que el tamaño del libro. Es uno de los libros menos impresionantes que he visto. Considero que su venta no cumple con las expectativas de calidad.

Good quality book

Whilst (for me - but hey - who am I to critisise) there are a few Homer Simpson 'doh' moments in Ricardo's thinking, his underlying principles are possibly more valid today to dig a country out of recession, than they were 'in the day'. Substitue Ricardo's various types of land - and what makes each desirable to own and RUN, and you have the principles of GLOBAL eCommerce trading - comparing (say) a farmer who realises a much larger income from his land by leaving his field 'fallow' and running 'car boot sales' once a week instead, to (say) trading on eBay as a 'market full of stalls where everyone wants something for nothing, to (say) selling on Amazon in a shopping mall full of shops where the more discerning customers flock. If (and its a BIG 'if') a trading treaty was signed to join America to the British Commonwealth - big and small - and also join America to Europe, we would see the end of the recession, we would blow the heavily subsidised goods we purchase from the Far East clean out of the water, and in doing so, we would see the dearth of famine, want, and disease as all three economies 'pull together' to achieve sustainable growth for everyone. Yes Ricardo's thinking is along the lines of Adam Smith - the man responsible for the principles that made Britain the richest country in the world - but Ricardo also has some very good 'twists' to Adam Smith's amazing thinking that should possibly be considered by our Government.

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