David Ricardo

Ricardo's theories of wages and profits

• In his Theory of Profit, Ricardo stated that as real wages increase, real profits decrease because the revenue from the sale of manufactured goods is split between profits and wages. He said in his Essay on Profits, "Profits depend on high or low wages, wages on the price of necessaries, and the price of necessaries chiefly on the price of food."

Ricardian theory of international trade

• Between 1500 and 1750 most economists advocated Mercantilism, which promoted the idea of international trade for the purpose of earning bullion by running a trade surplus with other countries. Ricardo challenged the idea that the purpose of trade was merely to accumulate gold or silver. With "comparative advantage" Ricardo argued in favour of industry specialisation and free trade. He suggested that industry specialization combined with free international trade always produces positive results. This theory expanded on the concept of absolute advantage.

Death and legacy

• Ten years after retiring and four years after entering Parliament, Ricardo died from an infection of the middle ear that spread into his brain and induced septicaemia. He was 51.
• He and his wife Priscilla had eight children together including Osman Ricardo (1795–1881; MP for Worcester 1847–1865), David Ricardo (1803–1864, MP for Stroud 1832–1833) and Mortimer Ricardo, who served as an officer in the Life Guards and was a deputy lieutenant for Oxfordshire.
• Ricardo is buried in an ornate grave in the churchyard of Saint Nicholas in Hardenhuish, now a suburb of Chippenham, Wiltshire. At the time of his death his assets were estimated at £675,000–£775,000.