Ricardo - The New View: Collected Essays I
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Samuel Hollander's interpretation of Ricardo has attracted apoplectic responses from both Right and Left. This volume collects together the material needed to evaluate these responses. His basic position - that Ricardo stands in a continuous analytical line leading from Adam Smith to Alfred Marshall - is seen to antagonise both those who argue for a 'marginal revolution' and a sharp divide between classical and neo-classical economics, and those who want to champion Ricardo as a forerunner of Sraffa.
abroad, – for the French revolution was exceedingly favorable to the increased production of food, that it is perfectly reconcileable to my theory. My conclusion is that there has been a rapid increase of Capital which has been prevented from shewing 2 itself in a low rate of interest by new facilities in the production of food. (17 August 1813; Ricardo 1951, VI, 94–5; emphasis added) Implicit in the argument is the presumption that but for improved agricultural technology during the
permanently lowered or raised by any other cause than by the cheapness or dearness of necessaries, or of those objects on which the wages of labour are expended. Accumulation of capital has a tendency to lower profits. Why? because every accumulation is attended with increased difficulty in obtaining food, unless it is accompanied with improvement in agriculture; in which case it has no tendency to diminish profits. If there were no increased difficulty, profits would never fall, because there
that “the rational foundation of the principle of the determining role of the profits of agriculture, in Ricardo’s early theory of profits, is that in agriculture the same commodity, namely corn, forms both the capital and the product”’ (1986: 189). Malthus himself made no such claim when undertaking his revisions; and it is difficult to see how a position on profit-rate determination taken by one economist in the 1820s casts light on the position taken by another economist in 1815. NOTES 1.
particularly engaged my attention’ – this in reply to Mill’s advice that he decide ‘whether ... to include in it a view of the whole science’ or only ‘those parts of the science which you yourself have improved’ (Ricardo 1951, VII, 112; EDR, 5). Similarly (also to Mill): ‘I hope I shall be able to convince you of the general correctness of my principles. I have dwelt very little on the effect of those taxes on which there can be no difference of opinion, and have not mentioned many which have
implications of Ricardo’s demand–supply orientation. IV. RICARDO AND THE THEORY OF DEMAND Nothing could be further from the truth than the tradition that demand theory played a small part, if any at all, in Ricardian analysis. Ricardo went to some lengths to make the point ‘that the production of no commodity, except from miscalculation, precedes the demand or anticipated demand for it’ (Ricardo 1951, VIII, 273–4). This 174 WAY MARSHALL WAS RIGHT ABOUT RICARDO apparently obvious point had to