science

On the Principles of Political Economy and Taxation

On the Principles of Political Economy and Taxation is a science topic covered in the lgStudy science library. This page brings together a partial reference excerpt, illustrations, worked examples, real-world applications and a short study plan, so you can understand On the Principles of Political Economy and Taxation rather than just read about it. In short: On the Principles of Political Economy and Taxation (19 April 1817) is a book by David Ricardo on economics. The book concludes that land rent grows as population increases.

Key takeaways

On the Principles of Political Economy and Taxation belongs to science; place it in that map before memorising details.
Learn the definition first, then one example that makes the definition concrete.
Connect On the Principles of Political Economy and Taxation to a quantity you can measure, compute or draw — that is where exam questions come from.
Reproduce the core statement of On the Principles of Political Economy and Taxation from memory before moving on to harder problems.

Reference excerpt

On the Principles of Political Economy and Taxation (19 April 1817) is a book by David Ricardo on economics. The book concludes that land rent grows as population increases. It also presents the theory of comparative advantage, the theory that free trade between two or more countries can be mutually beneficial, even when one country has an absolute advantage over the other countries in all areas of production. During the Napoleonic Wars, Ricardo grew weary of the Corn Laws, a tax imposed on wheat by the British that made it impossible to import wheat from the rest of Europe. Ricardo, despite his wealth, supported those who could no longer afford grains and bread once the price floor was in effect to support farmers. In his argument, for what is now free trade, Ricardo highlights the idea that if a country can get a good from another country at a lower cost, it would behoove a country to source that item from the cheaper producing country than to produce the good locally. "To produce the wine in Portugal, might require only the labour of 80 men for one year, and to produce the cloth in the same country, might require the labour of 90 men for the same time. It would therefore be advantageous for her to export wine in exchange for cloth." Ricardo's theory demonstrates that a country, when choosing between two goods to produce and trade, could still achieve an advantage by focusing on the good requiring fewer resources to produce, even if the country does not have an absolute advantage in that good. This allows countries with an absolute advantage in multiple goods, or with no absolute advantage at all, to still benefit from international trade. Ricardo claims in the preface that Turgot, James Steuart, Adam Smith, Jean-Baptiste Say, Sismondi, and others had not written enough "satisfactory information" on the topics of rent, profit, and wages. Principles of Political Economy is Ricardo's effort to fill that gap in the literature. Regardless of whether the book achieved that goal, it secured, according to Ronald Max Hartwell, Ricardo's position among the great classical economists Adam Smith, Thomas Malthus, John Stuart Mill, and Karl Marx. In his book Adam's Fallacy: A Guide to Economic Theology, economist Duncan K. Foley highlights that in the Principles Ricardo criticizes Adam Smith's treatment of the theory of value and distribution for circular reasoning, in particular as far as concerns rent, and that Ricardo considers the labor theory of value, properly understood, a more logically sound basis for political economic reasoning. Foley also discusses the chapter On Machinery, which Ricardo included in his third and final (1821) version of Principles. Here Ricardo famously analysed the impact of the adoption of machinery on the different classes of society, revising his earlier view that mechanization could be expected to be of benefit to each of the classes of the society. The increase in productivity due to mechanization lowers the production costs and thus also the real prices of commodities. Whereas the landowning class and capitalists benefit from the lower prices, workers in contrast do not reap such benefit from the lower prices if capitalists reduce the wage fund in order to finance the expensive machinery, causing technological unemployment among workers. In this case, Ricardo points out, wages are forced down by competition among workers, and the introduction of new machines can lead to an overall decline in the well-being of the working class.

References

External links On the Principles of Political Economy and Taxation by David Ricardo at MIA. Ricardo on Value: the Three Chapter Ones. A presentation tracing the changes in the Principles (University of Southampton). 1917 reprint by J.M. Dent & Sons, London and E.P. Dutton & Co., New York at the Internet Archive.

Illustrations

Worked examples

Example 1 — a first encounter with On the Principles of Political Economy and Taxation

Start with the simplest possible case. Write down what On the Principles of Political Economy and Taxation claims or describes in one sentence, then invent the smallest concrete situation in which that sentence is true. In science, the smallest case is usually a single object, a single equation or a single measurement. Check that every symbol or term in your sentence has a meaning in that case.

Example 2 — changing one variable

Take the situation from Example 1 and change exactly one quantity: double it, halve it, or set it to zero. Predict what should happen to On the Principles of Political Economy and Taxation before you calculate. Comparing your prediction with the result is the fastest way to find out whether you understand the idea or only the words.

Example 3 — an exam-style question

Typical questions about On the Principles of Political Economy and Taxation ask you to (a) state it precisely, (b) apply it to given data, and (c) explain a limitation. Practise writing all three answers in under five minutes; the third part is what separates a full-mark answer from an average one.

Applications of On the Principles of Political Economy and Taxation

In research: On the Principles of Political Economy and Taxation appears in science research whenever the underlying quantities have to be modelled precisely. Papers usually cite it as a starting assumption and then explore where it breaks down.
In technology and industry: Engineering practice reuses On the Principles of Political Economy and Taxation in design rules, simulations and safety margins. Knowing the idea lets you read a specification sheet and understand why the numbers look the way they do.
In the classroom: On the Principles of Political Economy and Taxation is common in secondary-school and first-year university syllabi. It links to neighbouring topics 1810s English-language non-fiction books, 1817 in economic history, 1817 in the United Kingdom, so understanding it makes those chapters shorter.
In everyday life: Look for On the Principles of Political Economy and Taxation outside the textbook — in sport, cooking, traffic, electronics or the sky above you. An example you found yourself is remembered far longer than one you were given.

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How to study On the Principles of Political Economy and Taxation in 20 minutes

Read the reference excerpt below once, without taking notes.
Close the page and write down what On the Principles of Political Economy and Taxation means in your own words.
Compare your version with the excerpt and mark what you missed.
Work through the three examples above with pen and paper.
Explain On the Principles of Political Economy and Taxation out loud to somebody else — or to Teacher Smith in the lgStudy chat.

Frequently asked questions

What is On the Principles of Political Economy and Taxation in simple terms?

On the Principles of Political Economy and Taxation (19 April 1817) is a book by David Ricardo on economics. The book concludes that land rent grows as population increases.

Why does On the Principles of Political Economy and Taxation matter?

Because it connects several science ideas at once: it gives you a definition you can apply, a quantity you can calculate, and a way to check whether a result is plausible.

How should I study On the Principles of Political Economy and Taxation?

Read the excerpt, restate it from memory, then work through the examples and applications listed on this page. The five-step study plan above takes about twenty minutes.

What does this page cover?

It gives you a compact reference excerpt plus original lgStudy explanations, examples, applications and study material on On the Principles of Political Economy and Taxation.