David Ricardo
British economist of Sephardic descent (1772–1823), born in London into a Jewish family of Dutch origin engaged in stockbroking, a trade his father abandoned when David married a Quaker against the family's wishes, but in which the young Ricardo had already trained well enough to amass, within a few years, a considerable fortune as an independent broker and financial speculator, allowing him to retire from business before the age of forty-two to devote himself to political economy and, in his final years, to politics as a Member of Parliament. Essentially self-taught — reading Adam Smith's Wealth of Nations introduced him to economics — Ricardo developed an extraordinarily abstract and deductive method of analysis, based on simplified models and chains of rigorous reasoning, which makes him the de facto founder of economics as a formal theoretical discipline, in contrast to Smith's own more descriptive, historical style. His main work, On the Principles of Political Economy and Taxation (1817), develops the labour theory of value, according to which a good's exchange value depends fundamentally on the amount of labour required to produce it, a theory that would decisively influence Karl Marx despite the radically different political conclusions he drew from it. Ricardo also formulates there his influential theory of land rent, according to which rent arises from differences in fertility between unequal-quality lands cultivated under growing demographic pressure, and, above all, the law of comparative advantage, perhaps his most enduring contribution: even if one country were more efficient than another at producing all goods, both countries benefit mutually if each specialises in what it produces relatively better and trades for the rest, an argument that remains the central theoretical foundation of the academic defence of international free trade. Ricardo also took part in decisive political debates of his time, such as the controversy over the Corn Laws, which he opposed as harmful both to workers and to overall economic growth.