On the Principles of Political Economy and Taxation

work by Ricardo

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July 23, 2026

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David Ricardo's On the Principles of Political Economy and Taxation (1817) was a critical commentary on Adam Smith's Wealth of Nations and introduced the concept of the economic model. Ricardo's system centered on the idea that economic growth is limited by the rising cost of food cultivation on finite land, influenced by the law of diminishing returns. He proposed that importing cheaper food could solve this, leading to his theory of comparative advantage, which advocates for countries specializing in goods they produce most efficiently and trading with others. This principle became foundational to 19th-century free trade doctrine. Ricardo also analyzed the distribution of national income among landlords, workers, and capitalists, suggesting that one class's gain often came at another's expense.1234

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classical economics
…expanded upon both ideas in Principles of Political Economy and Taxation (1817). In his labour theory of value, Ricardo emphasized that the value (i.e., price) of goods produced and sold under competitive conditions tends to be proportionate to the labour costs incurred in producing them. Ricardo fully recognized, however, that…
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…expanded upon both ideas in Principles of Political Economy and Taxation (1817). In his labour theory of value, Ricardo emphasized that the value (i.e., price) of goods produced and sold under competitive conditions tends to be proportionate to the labour costs incurred in producing them. Ricardo fully recognized, however, that…
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David Ricardo
Later, in Principles of Political Economy and Taxation (1817), Ricardo analyzed the laws determining the distribution of everything that could be produced by the “three classes of the community”—namely, the landlords, the workers, and the owners of capital. As part of his theory of distribution, he concluded…
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Later, in Principles of Political Economy and Taxation (1817), Ricardo analyzed the laws determining the distribution of everything that could be produced by the “three classes of the community”—namely, the landlords, the workers, and the owners of capital. As part of his theory of distribution, he concluded…
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distribution theory
Personal distribution
David Ricardo, in On the Principles of Political Economy and Taxation (1817), held that the landlords would receive an increasing part of the national income while capitalists would get less and less and that this shift in distribution would lead to economic stagnation. Karl Marx prophesied that the…
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David Ricardo, in On the Principles of Political Economy and Taxation (1817), held that the landlords would receive an increasing part of the national income while capitalists would get less and less and that this shift in distribution would lead to economic stagnation. Karl Marx prophesied that the…
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economics
Construction of a system
…Smith’s tome, David Ricardo wrote Principles of Political Economy and Taxation (1817). This book acted, in one sense, as a critical commentary on the Wealth of Nations. Yet in another sense, Ricardo’s work gave an entirely new twist to the developing science of political economy. Ricardo invented the concept of…
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…Smith’s tome, David Ricardo wrote Principles of Political Economy and Taxation (1817). This book acted, in one sense, as a critical commentary on the Wealth of Nations. Yet in another sense, Ricardo’s work gave an entirely new twist to the developing science of political economy. Ricardo invented the concept of…
Read More