David Ricardo

Value theory

• David Ricardo worked to fix the issues he felt were most concerning with Adam Smith’s Labour Theory of Value. Both men worked with the assumption that land, labour, and capital were the three basic factors of production. However, Smith narrowed in on labour as the determinant of value. Ricardo believes that with production having 3 main factors it is impossible for only one of them to determine value on its own.[21] Ricardo illustrates his point by adapting Smith's deer beaver analogy to show that even when labour is the only factor of production the hardship and tools of the labour will drive a wedge in the relative value of the good. Due to his criticisms of the Labour Theory of Value George Stigler called his theory a "93% labor theory of value".[22]
• Ricardo's most famous work is his Principles of Political Economy and Taxation (1817). He advanced a labour theory of value:[23]