Introduction

The Econ Guy this week is economist David Ricardo. David Ricardo was an
influential political economist who contributed many ideas and theories to the study of
economics. He published his first economics article at age thirty seven and spent his last
years as a professional economist.

Theoretical impact
David Ricardo contributed the theory of comparative advantage, arguing free
trade of countries and specialization from certain individuals and groups. Ricardo
believed that as long as each group specialized in a certain skill then all individuals
involved in trade benefit. Another idea of Ricardo’s was his Theory of Profit. It states that
as wages increases, profit decreases because the revenue that is collected is split between
profits and wages. Ricardo’s theories were generally accepted from his peers and
economists around the world. He achieved great success and lasting fame from his ability
to arrive at intelligent conclusions without any of the mathematical tools we have today.
Ricardo was a member of British Parliament and presented his theories among his peers
as a way of helping the British economy.

Summary
Ricardo’s theories of comparative advantage and profit are still used by
economists today. His ideas are taught in economics classes all over the world. His
famous theories helped establish and fluctuate economies across the globe. His theories
and influential ideas are the foundation of basic economics today. They have truly stood
the test of time.