A leading English CLASSICAL ECONOMIST who came to economic study after a rigorous Talmudic education at the Portuguese Synagogue of Amsterdam, a lucrative career as a London stock jobber and a chance reading of SMITH’SWealth of Nations at Bath in 1799. The great inflation of the Napoleonic Wars period brought him to write a pamphlet on monetary economics, The High Price of Bullion, in 1811. The CORN LAWS controversy inspired An Essay on the Influence of a Low Price of Corn on the Profits of Stock, his first attempt to create a model of the economy using the DIFFERENTIAL THEORY OF RENT, the law of DIMINISHING RETURNS and the inverse relationship between wages and profits. James MILL encouraged him to expand it into the larger, and very influential, Principles of Political Economy and Taxation, first published in 1817. What originally had been a theory to show that restricting corn imports would lead to an extension of cultivation to marginal land and a fall in the rate of profit became an integrated theory of value, distribution, international trade and taxation. The most controversial aspect of it was, perhaps, his theory of value. This was narrower than SMITH’S in that it emphasized labour quantities as an explanation of relative values at all stages of society and was more concerned with the quest for an invariable standard of value, seen by contemporaries as important at a time when INDEX NUMBERS were not available to show the extent of inflation. Although many of his key theories were not original (e.g.
DIFFERENTIAL THEORY OF RENT, the law Of COMPARATIVE ADVANTAGE) his central model dominated the thinking of his day and was to be an important starting point for John Stuart MILL, MARX and MARSHALL. As a Member of Parliament from 1819 for Portarlington, a rotten borough, he was to be an influential debater on central issues, especially on monetary questions, later being a major inspiration for the Currency School. His home at Gatcombe Park, Gloucestershire (later the home of HRH The Princess Royal), was used as the venue of the Political Economy Club, the only forum for the leading economists of the time to discuss economics. He died, much admired, leaving the immense fortune of £775,000, including agricultural estates, despite having created an economic theory so despised by the landed interest.
