David Ricardo: Machiavelli of the Margin

by Corey Robin on November 13, 2014

In my grad seminar this semester at the CUNY Graduate Center, “The Political Theory of Capitalism,” we’ve been exploring how some of the classics of modern political economy translate, traduce, transmit, efface, revise, and/or sublimate traditional categories of and concepts in Western political theory: consent, obedience, rule, law, and so forth.

Through economic thinkers like Smith, Ricardo, Keynes, Schumpeter, Jevons, and the like, we try and read political economy as the distinctively modern idiom of political theory. In the same way that religion provided a distinctive language and vocabulary for political thought after Rome and before the Renaissance, might not economics provide modern political theory with its own distinctive idiom and form? In other words, our interest in the political moment of economic discourse is not when the state intervenes or intrudes on the market; it’s when economic discourse seems to be most innocent of politics. That’s when we find the most resonant and pregnant political possibilities.

I’ll give you an example.

For the last several weeks we’ve been reading and talking about Ricardo’s On the Principles of Political Economy and Taxation, which I have to admit, damn near killed me. Turns out it’s really hard to teach a text you don’t understand.

But one of the more interesting—and, at least to me, semi-intelligible—arguments in Ricardo is his account of rent. (I don’t think the problem is Ricardo; it’s me.) For it’s there, in his chapter on rent, that he introduces the idea of the margin. I could be wrong, but I don’t see anything like a notion of the margin in other parts of the book. It’s all in his chapter on rent. (Ricardo experts or intellectual historians: is that right? Are there other places in Ricardo’s texts where he talks about the margin? Were there other theorists prior to Ricardo who talked about it?)

Now that in and of itself is interesting: Is there something to be gleaned from or learned about the idea of the margin from the fact that it arose, for Ricardo, in the context of a discourse on rent?

Anyway, here are three places in his chapter on rent where he talks about the idea of the margin:

The reason then, why raw produce rises in comparative value, is because more labour is employed in the production of the last portion obtained, and not because a rent is paid to the landlord.

Raw material enters into the composition of most commodities, but the value of that raw material, as well as corn, is regulated by the productiveness of the portion of capital last employed on the land, and paying no rent; and therefore rent is not a component part of the price of commodities.

It follows from the same principles, that any circumstances in the society which should make it unnecessary to employ the same amount of capital on the land, and which should therefore make the portion last employed more productive, would lower rent.


Ricardo’s basic idea of rent is that it arises from the differential in the quality of two tracts of land. So we start with land that is lush and fertile and easily farmed. At some point the population will require more food and more land will have to be put into play. So we move to the next piece of land, which is slightly less fertile and lush. At that point, the first piece of land generates a rent: the farmer and/or capitalist who use it will be willing to pay slightly extra in order not to have to use the slightly less fertile lend. And then we move to the third piece of land. And so on.

Ricardo’s basic intuition is that rent arises from difference:

If all land had the same properties, if it were unlimited in quantity, and uniform in quality, no charge could be made for its use, unless where it possessed peculiar advantages of situation. It is only, then, because land is not unlimited in quantity and uniform in quality, and because in the progress of population, land of an inferior quality, or less advantageously situated, is called into cultivation, that rent is ever paid for the use of it. When in the progress of society, land of the second degree of fertility is taken into cultivation, rent immediately commences on that of the first quality, and the amount of that rent will depend on the difference in the quality of these two portions of land.

At some point, we reach a final piece of land, beyond which it simply does not pay to work it at all. That final piece of land generates no rent; all it can afford is a wage to the laborer and a profit to labor’s employer. The tract of land just before that one generates a very little bit of rent. The one before that a little bit more. And so on back to the best land.

That last piece of really crappy land—with its concomitant last exertion of labor or last expenditure of capital—sets the value for the class of commodities that are produced on all the lands. For it is there, on that worst land, that the most labor will have to be expended in order to generate the commodity (the amount of labor required to produce the commodity determines the value of the commodity).


The exchangeable value of all commodities, whether they be manufactured, or the produce of the mines, or the produce of land, is always regulated, not by the less quantity of labour that will suffice for their production under circumstances highly favorable, and exclusively enjoyed by those who have peculiar facilities of production; but by the greater quantity of labour necessarily bestowed on their production by those who have no such facilities; by those who continue to produce them under the most unfavorable circumstances; meaning—by the most unfavorable circumstances, the most unfavorable under which the quantity of produce required, renders it necessary to carry on the production.



And while that last bit of land generates no rent—for all the value of the commodities sold is devoted to the wages of labor and the profit of the capitalist—every infinitesimal differential above that last bit of land will generate a rent. And though that last bit of land doesn’t generate a rent, the value of the rents on the better lands will be set by the value of the commodities produced on that last bit of land. The value of the commodities on that last bit will be high—”with every worse quality [of land] employed, the value of the commodities in the manufacture of which they were used, would rise, because equal quantities of labour would be less productive”—so the more productive labor working the better land will produce more commodities, so that better land will fetch a high rent.

Anyway, that’s the little bit of economics I could figure out (and I probably didn’t even get that right.)

But here’s the interesting part for me, as a political theorist.

In political theory, the great political moment, the highest mode of political action, is the founding of a new polity. Read Machiavelli, Montesquieu, Rousseau, Tocqueville, Nietzsche, Arendt: the founding moment is when all the basic laws, institutions, customs and mores of the polity are set out. It’s a moment of great drama and great art (that’s why Aeschylus mined it to such tremendous effect in the last play of the trilogy The Oresteia).

For political theorists of this vein, the further away you move from the founding moment—the further in time and place—the more loss, decay, corruption you will see. There is simply a fact of entropy that sets in, once the fervor and fever of that founding moment is lost. Machiavelli’s great obsession with Rome has much to do with the distance in time and space that the republic/empire travels from its founding as a small city.

The art of politics, then, is to steal back from time (and space) what it takes from the polity as it was founded, to deprive age of its ravages, to find a way to repeat the intensity, the engagement, the connection and commitment, of that founding moment. Whether through education, laws, festivals, rites, wars, what have you.

It struck me in reading Ricardo just how much the marginal theory of rent turns that idea of a founding moment on its head. Where the western theoretical tradition begins with a moment in time and place, and sees a threat in any movement away from that time and place, Ricardo’s theory of the margin begins at the opposite end of that process, with the last tract of land, which is furthest removed from the original tract in both time and space. And where the founding tradition of political theory sees the founding as the source of value from which all politics and morals emanate and decay—the founding is the pacesetter of values—the marginal theory of rent sees the outer limits of decay and decadence as the source of value: of the labor on that outer tract of land that is required for the production of the commodity, of the value of the commodity itself, and of the rent that commodity will generate on the inner tracts of land.

Ricardo himself seems to have had some intuition of how strange this all is. Not from a political theory perspective (though his comments are quite generative on that score) but from a more general cultural and sociological perspective:


Nothing is more common than to hear of the advantages which the land possesses over every other source of useful produce, on account of the surplus which it yields in the form of rent. Yet when land is most abundant, when most productive, and most fertile, it yields no rent; and it is only when its powers decay, and less is yielded in return for labour, that a share of the original produce of the more fertile portions is set apart for rent. It is singular that this quality in the land, which should have been noticed as an imperfection, compared with the natural agents by which manufacturers are assisted, should have been pointed out as constituting its peculiar pre-eminence.



Rent arises from decay, from the distance traveled from that founding tract of land.

And here’s where the fact that the marginal theory arises in the context of an account of rent, of money paid to a semi-aristocratic landlord, might matter. For in classical political theory of the kind we’ve been examining here, the supreme political actor is often assumed to be some sort of propertied worthy, a member of the landed gentry (that was part of the Country tradition of Bolingbroke’s circle in 18th century England) or such. His landed independence frees from him the imperatives of fear and favor, makes him a creature of civic virtue. It is a precondition of his agency.

But in Ricardo’s hands, the landlord is completely without agency. He’s more than a parasite; he’s utterly passive. Not only do his rents derive from the activities of others, but they go up in response to the imperatives of population growth that compel the harvesting of new and less fertile lands. He doesn’t act at all; he merely presides over and profits from the expansions and exertions of others.

And where the landed gentry of the political tradition are expected to attend to the maintenance and the upkeep of the polity, the preservation of its founding fervor, the landlords of Ricardo have a vested interest in the decay and demise of the lands and labors surrounding them. For that decay and demise provide the raw ingredients of difference that serve as the source of their rents.


Without multiplying instances, I hope enough has been said to show, that whatever diminishes the inequality in the produce obtained from successive portions of capital employed on the same or on new land, tends to lower rent; and that whatever increases that inequality, necessarily produces an opposite effect, and tends to raise it.


…it is obvious that the landlord is doubly benefited by difficulty of production. First, he obtains a greater share, and secondly the commodity in which he is paid is of greater value.



If what I’m saying about Ricardo’s theory of rent (and the significance of the margin for that theory) is true, the question becomes: to what extent can we read the entire tradition of marginal economics, which comes later and moves significantly beyond the category of rent, in a similar light, as standing the basic categories and concepts of political foundings on their head?

{ 28 comments }

1

Zamfir 11.13.14 at 6:16 am

Reading that part, I wouldn’t say that the existence of a range of lesser quality land is crucial for his argument. It’s the limited supply of good land that matters. If there were 100 square kilometres of uniform, high quality land and nothing else, then that land would have value, since the alternative to having that land would be having no land.

The comparison to land of lesser quality doesn’t make fundamental change. It’s just a weaker version of comparing to no land. In his hypothetical marginal case, it’s exactly the same as comparing to no land. So I wouldn’t put to much importance of those outer lands for his theory. Take away all of the lesser lands, and the good land would still have value.

2

john c. halasz 11.13.14 at 6:22 am

Several years ago, at Mark Thoma’s site, he posted a comment from somewhere, (i.e. neither his own post, nor a comment from the cages), to the effect that both Marshall and Marx could be regarded as disciples of Ricardo with good reason: only that, Marshall tried to argue that landlords were actually closer to capitalists than the Ricardan image of landlords would allow, whereas Marx tried to argue that capitalists were closer to landlords than the Ricardan image of capitalists would allow.

At any rate, though rough ideas about marginal determination of prices were around well before Ricardo, his theory of land rents was probably the first rigorous formulation. But he restricted his insight to land (or implicitly, natural resource) rents. What marginalists such as Marshall or Hobson did was to reject the notion that land was the uniquely fixed factor and the other factors (labor and capital) were variable or adjustable, by argumentatively applying the same procedure to each of the three “factors of production”. That did serve to obscure the role of economic rents, but it also expanded the terrain on which economic rents could be observed or applied.

3

RJL 11.13.14 at 7:55 am

[oops. some typo errors. this is a resubmission of previous comment]

I’d like to say that he took the idea of marginal value from Bentham, if perhaps only subconsciously. Bentham critised Smith’s labor theory of value, and instead posited his own theory of subjective use-value as the basis for exchange value. In the course of that discussion, Bentham offered his resolution of the water-diamond paradox (which had been resolved already by Italian and French economists) in the direction of the marginal concept. He pointed out that water only seems to have no exchange value because of its vast surplus, and that if there were few units of water left, they would be extremely valuable. Bentham worked out these ideas sketchily, in a pamphlet he was drafting titled The True Alarm. He passed the mss to Etienne Dumont, who tried to translate and re-work them into French, but confessed he couldn’t really understand what Bentham was on about. Dumont, hoping for some help, passed them on to James Mill and Ricardo who both expressed disagreement with Bentham, and sided with Smith. (Ricardo’s comments on this are in vol III of his collected works, around page 280ff.) Because of the negative comments by Mill and Ricardo, the manuscripts were discarded and the pamphlet never published. In my fantastical speculative account, Ricardo rejected subjective value theory but retained Bentham’s idea of value at the margin.

4

Stu 11.13.14 at 8:25 am

John Stuart Mill also rather famously discussed diminishing returns and the marginal utility of land in the Ricardian framework in his Principles of Political Economy:

See for example, Book I, Chapter XII, Of the Law of the Increase of Production from Land http://www.econlib.org/library/Mill/mlP12.html#Bk.I,Ch.XII

And the next chapter: http://www.econlib.org/library/Mill/mlP13.html#Bk.I,Ch.XIII

5

Joshua Beatty 11.13.14 at 12:54 pm

This struck me as analogous to Turner’s frontier thesis, in which “the existence of an area of free land, its continuous recession, and the advance of American settlement westward, explain American development.”

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Joshua Beatty 11.13.14 at 12:56 pm

Ricardo’s theory of the margin begins at the opposite end of that process, with the last tract of land, which is furthest removed from the original tract in both time and space.

This struck me as analogous to Turner’s frontier thesis, in which “the existence of an area of free land, its continuous recession, and the advance of American settlement westward, explain American development.”

7

Corey Robin 11.13.14 at 3:09 pm

RJL: Many thanks for that very useful background! Really helpful.

8

rvman 11.13.14 at 3:48 pm

Marginalism really ‘took over’ economics in the mid-1800s with Jevons, Walras, and Menger. Ricardo was writing in the 1800 time-frame, the ‘margin’ as a primary analytical concept more or less existed in primitive form as RJL notes, but wasn’t center-stage the way it was later – what he did with land rents was quite an innovation and somewhat ahead of his time. (Marshall, who RJL mentions, was writing considerably later – much nearer to the turn of the 20th century.)

9

JW Mason 11.13.14 at 4:07 pm

Mark Thoma’s site, he posted a comment from somewhere, (i.e. neither his own post, nor a comment from the cages), to the effect that both Marshall and Marx could be regarded as disciples of Ricardo with good reason: only that, Marshall tried to argue that landlords were actually closer to capitalists than the Ricardan image of landlords would allow, whereas Marx tried to argue that capitalists were closer to landlords than the Ricardan image of capitalists would allow.

It was Joan Robinson who originally said this.

10

Peter Dorman 11.13.14 at 8:50 pm

Zamfir 1 is correct: there are two models for rent determination in Ricardo, extensive and intensive. Extensive rent derives from the difference in non-land costs of production on different parcels called into use by the extent of demand. Intensive rent derives from the difference in costs of production resulting from the need to exploit some parcels more intensively than others because the cheapest (but more land-using) methods will not meet demand if employed everywhere. It turns out that, algebraically, the first can be rewritten as a special case of the second. This is important because, in its intensive version, rent does enter into the cost of production of commodities—a problem for the labor theory of value.

Marx argues in what became volume III of Capital that the persistence of land rents was due to the survival of a landowning class that monopolizes land, and that the course of capitalist production will eliminate them (and it). He actually goes so far as to dispute Ricardo’s intensive margin, but on this score Ricardo was right and Marx was wrong. That’s an important matter, I think, for the history of social theory. (Marx also rejected Proudhon’s use of marginal analysis in the theory of profit and exploitation and was wrong again, although that’s a topic for another day.)

But Ricardo’s claim that the landowner is “sterile” and makes no contribution to economic progress is based on assumptions built into his theory. Ricardo is turning Quesnay on his head, of course, but also making an argument with immediate political implications. (This was most fully developed in the work of Henry George.) This sterility follows from Ricardo’s assumption about the “original and indestructible powers of the soil”: today’s supply of land parcels is the same as yesterday’s and tomorrow’s. Of course landowners have nothing to offer society, because their asset is simply passed along unaltered from one generation to the next. When I discuss this in class I usually mention that Ricardo was a city boy (although he retired to rural gentility after he made his fortune), but even so it is an extraordinary assumption given the massive investments made in improving agricultural lands in eighteenth century England. Once you understand that the quality of land can be enhanced or degraded by how it is used (and this of course applies to all natural resources), the landowner really does become similar to a capitalist, and modern historians now understand the extent to which the emergence of capitalism was a product of the countryside as well as the city.

In modern economics the dramatic political economy of Ricardian rent theory has been narrowed to the notion of marginal cost pricing: the representative firm in a competitive industry increases output until the (rising) marginal cost is equal to the given market price. The distinctive scarcity of land in Ricardo’s scheme has been generalized to all commodities, as advertised in what remains the most popular definition of what economics is about in the first place—allocation of scarce means etc. There is nothing remote in any meaningful sense about one point along the marginal cost curve compared to any other.

Yet the notion of scarcity that Ricardo and his ilk took for granted was not simply the result of an oversight. There really is an intertemporal sense in which some inputs to production are more freely reproducible and others less. This was lost in economics in the wake of the marginalist revolution, but is slowly coming back as people begin to incorporate ecological constraints more explicitly into economic thinking. Scarcity means something different where irreversibilities apply, for example. (Economists squeeze this into “option value”, but the current valuation of future opportunities to make different uses of resources gets at only a piece of the problem.)

I don’t think Ricardo was, at heart, a political thinker. He had a fascination—obsession really—with the abstract logic of economic models. He translated what he thought he learned from his studies rather mechanistically to practical politics, as in his positions on the Poor Laws, the Corn Law, and the machinery question. (Mechanistic on the machinery question?) I don’t especially like his politics, but they follow rather directly from his models. Perhaps at a deeper, more meta level you could say that Ricardo believed in a manageable realm of public action, that disciplined analysis could reveal how economic outcomes were determined, and that it was the task of these analysts to patiently explain how the world works to their peers. He knew that social classes would try to bend policy toward their particular interests, but that the enlightened analyst, beholden to no single group, could make a difference. A lot of what’s good and bad about modern social science is packed into this belief.

11

ar 11.13.14 at 10:59 pm

Is there any chance you could post the syllabus for your course? It would be nice to see how you’ve organized things…

12

John Quiggin 11.14.14 at 2:10 am

On the economics, I agree pretty much with Peter Dorman.

On the bigger question, I’d link it to the general shift in political thinking in which the notion of progress (as opposed to decline from an idealised origin) became central.

The core question of C19 economics was whether progress could continue indefinitely. Since there was no proper notion of technological progress, the answer was generally no. The conclusions were either
(a) Population growth would reduce everyone except a socially valuable elite (eg parsons) to subsistence level
(b) Capital accumulation would drive the rate of profit to zero, producing a steady state (Mill)
(c) Capital accumulation would drive the rate of profit to zero, producing crisis and revolution (Marx)
(c)

13

Corey Robin 11.14.14 at 4:55 am

14

Robert 11.14.14 at 11:29 am

Ricardo was also a Member of Parliament. I gather his speeches were a matter of abstract logical deduction. Was anybody before him addressed with the question, “What planet are you from?”

I guess sometime between Smith and Ricardo’s Principles, there was a debate about whether rent was due to the generosity or stinginess of nature – I do not think I have the right terminology.

Ricardo emphasized the extensive marginal, while the later marginalists emphasized the intensive margin. Ricardo needed the intensive margin to explain why his theory was valid, even if cultivated land paying no rent could not be found anywhere in England. The marginalists attempt to extend marginal principles to all factors of production never succeeded; they could not coherently handle capital.

Ricardo, Malthus, and Edward West all formulated the theory of the rent a bit earlier than Ricardo’s book, in competing pamphlets. I guess Malthus and West were earlier than Ricardo.

I guess the theory was first formulated by the American, James Anderson, although he did not have much impact. As I understand it, Anderson’s theory was more dynamic. For example, he would understand that agricultural land around Rochester or Buffalo, NY would be low rent (because of high transportation costs to markets) before the construction of the Erie Canal, and high rent afterward. (There is a recognition in Ricardo of permanent improvements.)

Marx had a theory of absolute rent, to be added on to the rent explained by marginal principles. I think it was connected with the Labor Theory of Value. Agriculture, being labor intensive, would generate more value per dollar invested, and, through monopoly forces, the landed gentry could capture some of this value in the form of absolute rent. The idea of rent as a monopolistic return was held more generally during the classical era.

15

ar 11.15.14 at 12:23 am

Great, thank you!

16

LSTB 11.15.14 at 3:23 pm

to what extent can we read the entire tradition of marginal economics, which comes later and moves significantly beyond the category of rent, in a similar light, as standing the basic categories and concepts of political foundings on their head?

Marginal economics was (mostly) designed to stand Ricardo on his head. By the early 1890s, John Bates Clark opens “Distribution as Determined by a Law of Rent,” with, “The law of rent has become an obstacle to scientific progress: it has retarded the attainment of a true theory of distribution.” This is really an attack on Henry George, mentioned by Peter Dorman above. Bates Clark and many academic economists of the late 1800s hated George’s political crusade against unearned land rents. The book to read on the subject is Neo-classical Economics as a Strategem against Henry George by Mason Gaffney.

17

LFC 11.15.14 at 3:32 pm

Can’t say I’ve read the OP and the thread with the care they deserve, and I have nothing to contribute on Ricardo, but I just read the opening sentences of Corey’s linked syllabus:

In ancient Greece, the dominant political form was the city state. In Rome, it was the republic and the empire. After the fall of Rome, it was the Church. In the early modern era, it became the state. Today, it is capitalism.

I find this interesting and provocative. It’s probably not how I would put things, b.c. I don’t think of capitalism as a “political form” in the way that city-state, empire, and sovereign-territorial state are. I’d be inclined to say that the state is still the dominant political form, while global capitalism has major effects on how that form (the state) ‘works’ (or doesn’t work). Indeed there’s an argument to be made (and it was made by I. Wallerstein in the first vol. of The Modern World-System) that strong states (by early-modern standards) and capitalism needed each other, so to speak, i.e. that the growth of stronger states helped fuel the growth of a capitalist world-economy in the ‘long 16th century’. From that perspective, the state as the dominant political form and capitalism in its proto-globalized form emerged together and are part of the same historical configuration (for lack of a better word).

Just tossing this out; I realize it doesn’t have much to do with the questions raised in the OP.

18

Bruce Wilder 11.15.14 at 11:18 pm

The syllabus’ world-historical precis leaves out medieval feudalism and manorialism — the political and economic forms, respectively — with which the Church lived in antagonistic symbiosis.

Rent matters as much as it does, because of the legacy of a decadent feudalism, which concentrated land ownership, a political power, in a few, greedy, but careless hands. Capital and Labor are locked in a zero-sum game over the division of income between wages and profit, and as both struggle to adapt to changing circumstance, the incomes of both are regulated by the imperative to reproduce, while Rent, unregulated because Land doesn’t need to reproduce, receives a residual income and, thus, becomes the ultimate lodgment of surplus, making the morally barren landlords the primary beneficiaries of national progress.

The Marginalists generalized ownership as a concept and called it, scarcity, stripping away the political from political economy, legitimized capitalism with an analysis of the distribution of income that made every factor proportionately deserving. Intellectually, it was a catastrophe — the equivalent of administering a frontal lobotomy to an entire social science. Oh well.

19

Rakesh Bhandari 11.16.14 at 7:40 am

Peter wrote: “…because, in its intensive version, rent does enter into the cost of production of commodities—a problem for the labor theory of value.”
Peter, could you explain why this is so? And why rent in its extensive version apparently does not enter into the cost of production of commodities?

20

Rakesh Bhandari 11.16.14 at 5:08 pm

I think that CR gets exactly right the Ricardian idea that the value of a whole class of commodities can be determined not by the average labor time to reproduce them but by the labor time necessary to reproduce them on the marginal land. I am not sure about the political theoretic consequences in terms of ‘founding’ but do agree that the landlord is now understood in a new way. And of course there are clear policy implications as regards the Corn Laws. What is interesting here is about how policy implications can be, and were, derived from an economic model. I think that these connections were explored in Mark Blaug’s first book. I have not read Stimson’s book on Ricardian politics. A strong version of the thesis can be found in Ranjani Kanth. The connections between model and policy were clear to I.I. Rubin in his history of of economic thought. And I think to Terry Peach too. But it’s been a long time since I read this literature.

21

Rakesh 11.16.14 at 5:16 pm

on 12 the rate of profit does not have to fall to zero for there to be crisis; if the mass of surplus value appropriated is insufficient for many capitals to continue to accumulate or many capitals fear that the whole of the appropriated mass of surplus value will have to be capitalized, leaving nothing for the capitalists’ own consumption, then accumulation can slow down to the point that there would be a general crisis of overproduction, coupled with a rising stock of idle money capital. At least that is how Grossman reconstructs Marx’s theory of the falling rate of profit.

22

Rakesh 11.16.14 at 5:33 pm

Marx of course criticized Ricardo for explaining falling profitability only by a resort to organic chemistry.

23

Stuart Ingham 11.17.14 at 1:07 pm

The differentiation of value of land doesn’t just happen at the decaying periphery. Improvements are made to the most valuable land–in terms of transport, infrastructure beautification etc.–that make it more valuable relative to its next available site. This is also obviously true when we move marginal theory away from land and into labour, where (too) much economic explanation is focused upon the cultivation of rare skills.

24

Rakesh 11.17.14 at 8:03 pm

Yes, this raises the question of whether rents actually rose absolutely and relatively for the reasons that Ricardo specified in his model or theory. Richard Jones and others argued that Ricardo’s abstract theorizing was contradicted by actual empirical developments. So we have here probably a most important contradiction between formal theorizing and empirical work in the history of political economy. It’s not clear that Marx took Ricardo’s side in this debate. For example see his sympathetic chapter on Richard Jones in TSV.

25

James Wimberley 11.17.14 at 9:05 pm

Ricardo’s passive and parasitic landlords were a far cry from the truth, except perhaps in Ireland. In England at any rate, they had spent the preceding century energetically expanding their rents through investments in “improvements” like Turnip Townshend’s marl pits, the brutal social engineering of enclosures, and improving communications through roads and canals. What they were doing was, in terms of Ricardo’s theory, widening the differential between good land in say Norfolk and marginal land in say Scotland. Compare the careful exploitation of the value of their legacy IP by Disney and Marvel.

26

Brian ning 11.17.14 at 9:29 pm

What I have taken from this is that Ricardo’s theory is distinctly “democratic” by the way Tocqueville describes America in comparison to Aristocracies. One of his main criticisms of the democratic man is that he is more base; he wants to add “a few yards to his land” etc. stemming from need (because Americans were not so rich that they could not work), and so must focus first on the necessary. Of course, Aristocrats, from the article, were “civic gentry”, and this is because of the luxury of leisure. Aristocrats (following an Aristotlean strain) felt that making money was not all that life was, but it was only because of leisure, because they didn’t need to focus on the “necessary” that it was possible to seek the noble. It seems that Ricardo is arguing on the basis of this sort of “democratic man”–that money is critically important, and so justifies the desire for higher rents due to marginalization. Yet, for an aristocrat who already had everything, Tocqueville noted that they often rejected materialistic goods, perhaps because they felt no want for the necessary through their lives, this already being fulfilled for them. It comes down to different ways of thinking and was elaborated by Aristotle in the Politics (I think): that democracies will often deal with distributive justice, money and the necessary being the primary good for the poor, who have none. Yet, he also said that mere life is not the good life, and so for Aristocrats with an eye to the good life would less likely be such sticklers about money, considering that they have all the necessaries already fulfilled.

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Rakesh 11.17.14 at 9:55 pm

I am wary of too much Ricardo bashing–after all, there is his criticism of the Smithean adding up theory of value and the demonstration of an inverse relationship between profits and wages (see Maurice Dobb Theories of Value and Distribution). It may be true that wages do not have to rise to the detriment of profits even if prices of agricultural goods are rising–prices of mfg goods could be falling, though that could exert downward pressure on profits; and it may be true that the more intensive and extensive cultivation of land need not result as a result of declining marginal productivity in rising prices for agricultural goods that would pit landlords against industrialists.
But still Ricardo clarified the possibility of class conflict.

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QS 11.19.14 at 12:08 pm

Thanks for posting the syllabus, Corey. Any reason you use the Liberty Fund publications of Smith? I cringe at the thought of sending them students’ dollars (or any dollars, for that matter).

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