David Ricardo (1772-1823) was an English economist famous for his theories of economic development and international trade.
Adam Smith founded a "school" of economics. Particularly strong in England, Smith's followers dominated the field in both Europe and the United States for almost a century. They represented the orthodox approach to economic problems and policy until the last quarter of the nineteenth century and were united by their acceptance of Smith's liberalism and his system of natural liberty. Their analytical system was founded on Smith's equilibrium of supply and demand in competitive markets and on the labor theory of value. They generally favored freedom of action for business enterprise, strong limitations on government, free trade, and free movement of capital. Classical economics is the name usually given to this style of thinking.
Four other economists made major contributions to the classical system. They were Thomas R. Malthus, David Ricardo, Jeremy Bentham, and JeanBaptiste Say. Working primarily in the turbulent first quarter of the nineteenth century, when the world economy was percolating with the changes wrought by war, revolution, economic change, population growth, new technologies, and political upheaval, they sought to analyze the economy in terms of a few basic underlying principles. In doing so, they turned economics into the first social "science."
Adam Smith's Wealth of Nations had just been published when an age of revolution began—the great political and social revolutions in the American colonies and later in France that wiped away the last vestige of European feudalism and the old aristocratic order. There was a good deal of sympathy
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in England for the American revolutionists, since many Englishmen felt that their own society retained unwanted remnants of the old order. One of the reasons for the success of the American Revolution was undoubtedly the opposition of English liberals to continuing the war. Political reform was a particularly strong issue in England, since many members of Parliament represented districts with very small populations, while some large cities, emerging as a result of economic change, had no representation at all.
Many Englishmen looked with favor upon the French Revolution, too. They thought it would bring democracy to France, develop a society similar to that of England, and establish peace between two nations that had been at war intermittently for more than a hundred years. Charles James Fox, leader of the liberal Whig party, praised the fall of the Bastille, calling it the "greatest event.. . that ever happened in the world." Even William Pitt, the Tory prime minister, felt that the Revolution would enable France to become more like England, and he forecast years of peace and tranquillity between the two nations.
There were, of course, conservatives who took a stand against the French Revolution from the very beginning. Edmund Burke, for example, in his Reflections on the Revolution in France (1790), opposed the treatment of the French king and aristocrats by the French mob and feared that freedom, justice, and order would be destroyed by the growing radicalism of the "swinish multitudes."* When the Reign of Terror began, British opinion shifted to support the conservative position. The intellectual leaders who favored the Revolution—such as Thomas Paine, who wrote The Rights of Man in 1790 as an answer to Burke—were discredited. Some changed their minds to support the conservative position. Prime Minister William Pitt had come into office on a platform of social and economic reform but turned to a policy of uncompromising conservatism. At one point he stated, "Seeing that where the greatest changes have taken place, the most dreadful consequences have ensued .. . and .. . seeing that in this general shock the constitution of Great Britain has remained pure and unchanged in its vital principles ... I think it right to declare my most decided opinion, that. . . even the slightest change in such a constitution must be considered an evil." The policy of the British government became one of maintaining the status quo, resisting reform, and—worse—suppressing voices of dissent.
When the wars with France began, legal action was taken in England to "prevent disloyalty." In 1795 the Habeas Corpus Act was suspended for five years; all secret associations were banned; all lecture rooms where admission was charged were legally classified as brothels, in order to prevent meetings; any meeting attended by more than fifty persons had to be superintended by a magistrate; all printing presses had to be registered with the government; export of English newspapers was prohibited; the Correspond
*The title of this book, The Age of the Economist, is taken from a passage in Burke's Reflections: "The age of chivalry is dead, that of sophisters, economists and calculators has succeeded, and the glory of Europe is extinguished forever." In those days the economist was considered to be a liberal reformer.
ing Society, a group of reformers who tried to spread news of their cause by writing letters, was suppressed in 1799. In that year and the next, the AntiCombination Laws were passed, which prohibited any kind of combination of either workers or employers for the purpose of regulating conditions of employment. There is no record that the laws were enforced against employers, but workmen were prosecuted and nascent labor unions destroyed. An atmosphere of suppression prevailed.
Although reform was prevented, the march of events could not be halted. The war years of the late eighteenth and early nineteenth centuries were years of broad and rapid change. Industrialization was greatly stimulated by wartime demand. The agricultural revolution was speeded up by wartime increases in the price of food. Population was growing rapidly and shifting from rural to urban. As cities grew, slums, inadequate sewage and water systems, and other urban ills developed on a large scale. The multitude of economic and social problems generated by these vast changes went unsolved, while "the Establishment" concerned itself with holding the line and rooting out the "radicals."