Ricardo and Malthus worked much the same theoretical territory.
Both were concerned with extending the tradition launched by Smith and with sharpening its insights. Moreover the writings of both responded to the unusual circumstances of the Napoleonic wars and their aftermath.
On a number of specific points they arrived at quite different conclusions. Nevertheless, both aimed their analytical sights on the classical problem. For his part, Ricardo identified himself with its central issues when he declared that the 'principal problem in Political Economy' was to ‘determine the laws' regulating distribution between the various classes and their relation to the general circumstances of society.The aspect of this theme on which Ricardo initially focused attention was more restricted in scope: the effects on the economy as a whole of the protection afforded to agriculture by the Corn Laws. In the circumstances of the time, it was by no means accidental that this issue should have occupied a dominant place in Ricardo's thought. The Napoleonic wars - combined with a run of poor harvests- had, as noted earlier, converted the British economy into a net importer of food grains. Corn prices had skyrocketed and meanwhile the income of landlords had been swollen. On one estate for which systematic records have been kept, for example, the landlord's return increased by nearly tenfold between 1776 and 1816. Not all of this return can be interpreted as an 'economic rent' in the sense in which Ricardo and Malthus wrote about it in their theories; part represented a return on investments to raise the productivity of the soil. Nevertheless it was abundantly apparent that a fundamental change in the balance of agriculture (relative to the rest of the economy) had occurred.
These problems were aggravated by amendments to the Corn Laws passed shortly after the end of the war. Their effect was to make the protection of domestic agriculture virtually absolute by prohibiting the importation of foreign grain until the domestic price of wheat exceeded sixty shillings per quarter.
The problem to which Ricardo addressed himself was clearly real and important. His preoccupation with the significance of agriculture was apparent in the phrasing he chose to preface his major work:The produce of the earth - all that is derived from its surface by the united application of labour, machinery, and capital, is divided among the three classes of the community; namely, the proprietor of the land, the owner of the stock or capital necessary for its cultivation, and the labourers by whose industry it is cultivated.
But in different stages of society, the proportions of the whole produce of the earth which will be allotted to each of these classes, under the names of rent, profit, and wages,
will be essentially different; depending mainly on the actual fertility of the soil, on the accumulation of capital and population, and on the skill, ingenuity, and instruments employed in agriculture.1
In much of his writing Ricardo viewed the whole economy as if it were one giant farm.
The method Ricardo employed in dealing with this problem gave to his analysis a tone of generality. His prose style - by contrast with that of Smith and Malthus (which had been embellished with homely illustrations and the occasional parenthetical homily) - was spare and formal. Moreover, his acute analytical perception led him well beyond the practical issue that had originally turned his mind to theoretical investigations. It was the more general version of his model that was to leave a lasting mark on the techniques of economic theorizing.
1.