David Ricardo was a self-made millionaire landowner who argued vehemently against the interests of landowners. He published only one book, Principles of Political Economy and Taxation, but is recognized for putting forth an economic theory based on business interests. In putting forth economic theories that contradicted the interest of landowners, Ricardo incurred the criticism and anger of others in his class. Nonetheless, Ricardo continued to be a vociferous critic of laws which favored landowners, most notably the so-called "Corn Laws" and argued in favor of free trade as a way of better distributing goods across international borders. This research examines Ricardo's arguments and positions, and evaluates his contribution to modern economic and political discussions regarding free trade and distribution of wealth.
According to Adam Smith, economies are made up of producers who manufacture (or grow) a variety of goods. Each producers is able to do so at a particular cost, with the cost being affected by any number of factors. The concept of absolute advantage holds that the producer who can produce a good more cheaply than any other producer should do so. He will then sell his good to those producing other goods (which they do more efficiently than anyone else) and the result is an economy with a large number of efficiently produced goods and the income with which to produce them. In this way, if one farmer can produce corn at $5 per bushel and wheat at $6 per bushel, and his neighbor can produce corn for $3 per bushel and wheat for $5 per bushel each, then the neighbor should produce both corn and wheat. The absolute advantage that any one producer has results in the most efficient cost (and thus price, according to Smith) for that good and the greatest overall good for the economy (Schweinberger, 1996, p. 362).
Ricardo did not accept Smith's theory of absolute advantage, but instead held that economies benefit more w...