His “most favourite subject”
Ricardo’s interest in political economy was ignited during a stay in Bath towards the end of 1799, where he had brought his wife for a cure vacation after she had fallen ill when their third daughter and fourth child had been stillborn.
As a pastime Ricardo began to read Adam Smith’s Wealth of Nations (1776 [1976]), which he had discovered in a circulating library. He was deeply impressed and fascinated by the book and ordered a copy to be sent to his home. Political economy advanced to his “most favourite subject” (Works VI: 263). Economic and political events amplified his interest in it. In February 1797 the Bank of England had suspended the convertibility of its bank notes into gold, and inflationary tendencies arose in Great Britain. These events triggered the so-called “Bullion Controversy” in which Ricardo was a major participant. He published his first article anonymously in 1809 on “The Price of Gold” in The Morning Chronicle. A year later followed his pamphlet The High Price of Bullion, a Proof of the Depreciation of Banknotes. These made him quickly known in learned and political circles. The Bullionists and Ricardo argued that the Bank of England’s increase of the circulation of money was responsible for rising prices, whereas the anti-Bullionists maintained that the money supply was driven by the “needs of trade” reflected by the real bills presented to the Bank for discount. The “Bullion Report” to the House of Commons was strongly influenced by Henry Thornton, a Bullionist, but reflected also ideas of Ricardo. In several letters to the Morning Chronicle and in a pamphlet titled Reply toMr. Bosanquet’s ‘Practical Observations on the Report of the Bullion Committee’ (1811), Ricardo defended the Bullion Report and attacked the Bank of England, whose policy, while benefiting a few, harmed the interests of the nation at large.