Ricardo became interested in economics in 1799 after, apparently by chance, reading the work of Adam Smith. He subsequently published pamphlets and articles analyzing various economic problems of the day, including the stability of the currency and the national debt. After some struggle ("I fear the undertaking exceeds my powers," he wrote), his classic work, The Principles of Political Economy, appeared in 1817. Two of Ricardo's most important contributions were the theory of rent and the concept of comparative advantage. The former, which drew on the writings of (among others) his close friend and critic Robert Malthus, defined rent as "that portion of the produce of the earth which is paid to the landlord [by the tenant farmer] for the use of the original and indestructible powers of the soil." Rent, Ricardo argued, is what remains from gross farm revenue after all the farmer's production costs have been paid, including remuneration for the capital and labor he had expended on the land. It is an unearned surplus (now referred to as an economic rent) in that its payment is not necessary to ensure a supply of farmland. For Ricardo, rent arises from the advantages that one site has over another due... [continues]
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