April 18, 1772, is the birthdate of David Ricardo, the brilliant scion of a family of Portuguese Jews in England who became a founding father of the modern science of economics.
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Ricardo was the third of the 17 children of Abraham Israel Ricardo and the former Abigail Delvalle. The father’s family had left Portugal for Italy, probably in 1593, when the Grand Duke of Tuscany invited Iberian Jews to emigrate to Leghorn. They later moved to Amsterdam.
David was born in London, where his businessman father had moved in 1760. Abigail’s family, also Sephardi, had long been established in England.
Toward the end of his life, Ricardo told a biographer that he had received a very limited education, as his father “thought reading, writing and arithmetic sufficient” for the man of business David was “doomed” to be. At age 14, he had already begun to work with his father, in the City of London.
Ricardo broke dramatically with his parents at age 21, when he married a Quaker woman and joined the Unitarian church. His father disowned him – although they reconciled, before his father’s death – and his mother never spoke to him again.
British economist Ronald Max Hartwell wrote of Ricardo that, when he married, he “was a poor man; at the time of his death, 30 years later, his total estate was worth between £675,000 and £775,000. How did he make such a large fortune? In three ways: As a Stock Exchange jobber, as a labor contractor, as an investor in land and French bonds.”
At the time of the Battle of Waterloo in 1815, Ricardo, with advance news of the French defeat by the British, sold off his British securities quite openly, leading others to panic and do the same. He then repurchased the same shares at bargain-basement prices, and watched their value escalate after news of Wellington’s victory over Bonaparte became widely known. Overnight, he became one of England’s wealthiest men.
Around that same time, finding himself “sufficiently rich to satisfy all my desires and the reasonable desires of all those about me,” as he wrote to his friend James Mill, Ricardo bought a 5,000-acre estate in Gloucestershire (today owned by Princess Anne), and took up the life of gentleman farmer.
In 1799, after reading Adam Smith’s seminal economics text “The Wealth of Nations,” Ricardo began a serious study of the subject. He discussed his ideas with friends like Jeremy Bentham, Thomas Malthus and Mill (father of John Stuart Mill), the latter encouraging him to write them down.
In many articles, and such books as “On the Principles of Political Economy and Taxation,” Ricardo explored the relationships between policy and economics. Probably his most significant contribution was his opposition to protective tariffs, and his belief in free trade and the concept of “comparative advantage,” by which he insisted that each country should specialize on one product for export, and depend on other states for other things.
Though many of Ricardo’s laissez-faire principles have long since been superseded, he is an economist who was long studied by both those who agreed with him and those who didn’t, including Karl Marx.
In 1819, Ricardo entered Parliament, having bought himself a “rotten borough” in Ireland, a common and legal practice then. He served until 1823, when illness made him retire.
He died on September 11 of that year, after an infection of the middle ear turned into blood poisoning.
Ricardo and his wife had eight children, two of whom became MPs. He was universally respected for his personal integrity, which included his advocacy of economic reforms that would have an adverse effect on his own personal situation.