ADAM SMITH AND DAVID RICARDO

To begin with, Smith's theory changed the agricultural priorities of economics in his assertion that "labor, not nature, was the source of value" (Smith 49). In other words, it is the availability (and cost) of labor, rather than whether the weather is seasonable or not, that contributes to the overall economic picture. What Smith argued was that many economists previously had "failed to see that labor could produce wealth wherever it performed, not just on the land" (Smith 49).

This led Smith to certain laws of the market, which basically indicate that the market tends to move in the direction of primary public interest. "Adam Smith's laws of the market are basically simple�Specifically they show us how the drive of individual self-interest in an environment of similarly motivated individuals will result in competition" (Smith 55) Moreover, that competition changes as demands for goods and services change, and, of course, so does the price asked by providers, and willingness to pay by the consumer.

"Society to Adam Smith was a great family; to Ricardo it was an internally divided camp" (Ricardo 79). The concern seemed not to be the increasing power and profit of industrialists, but an increase in population which exceeded the agricultural supply. This meant high food prices, because food had to be imported from outside Britain. An argument in Parliament went under the theory that regardless of the p

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Category: Economics - A