vid David Ricardo was one of those rare people who achieved both tremendous success and lasting fame.David Ricardo was born in 1772. He was the third of seventeen children. His family was descended from Iberian Jews who had fled to Holland in the early 18th Century. Ricardo’s father, a stockbroker, emigrated to England shortly before David was born.Ricardo began working full-time for his father at the London Stock Exchange when he was fourteen. When he was 21 his family disinheriated him when he married a Quaker. Luckily he already had an excellent reputation in finance and he set up his own business as a dealer in government securities. He quickly became very rich.David Ricardo retired from business in 1814 and was elected into the British parliament in 1819 as an independent representing a borough in Ireland, which he served up to his death in 1823. In parliament his main interests were in the currency and commercial questions of the day. When he died, his estate was worth over $100 million in today's dollars.
At age twenty-seven, after reading Adam Smith’s The Wealth of Nations, Ricardo got excited about economics. He wrote his first economics article at age thirty-seven and then spent the following fourteen years—his last ones—as a professional economist.Ricardo first gained notice among economists over the “bullion controversy.” In 1809 he wrote that England’s inflation was the result of the Bank of England’s propensity to issue excess banknotes. In short, Ricardo was an early believer in the quantity theory of money, or what is known today as monetarism. In his Essay on the Influence of a Low Price of Corn on the Profits of Stock (1815), Ricardo articulated what came to be known as the law of diminishing marginal returns. One of the most famous laws of economics, it holds that as more and more resources are combined in production with a fixed resource—for example, as more labor and machinery are used on a fixed amount of land—the additions to output will...
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