The Macroeconomic Perspectives of David Ricardo, Karl...

The Macroeconomic Perspectives of David Ricardo, Karl Marx, and John Stuart Mill ECON 350 19 November 2012 Abstract The author surveys three influential economists of the Classical era—Ricardo, Marx, and John Stuart Mill—and introduces the reader to their Macroeconomic perspectives based on some of their more prominent Macroeconomic theories. David Ricardo David Ricardo was a Classical Economist who lived from 1772 to 1823. In his professional life he wore many hats: he was a businessman, a financer, a speculator, and a member of Parliament. But what he is most remembered for is the role that he played in the evolution of economic theory, alongside of such other greats as John Stuart Mill and†¦show more content†¦This was actually quite a big deal during Ricardo’s since Protectionist policies were hindering free trade, which Ricardo was a proponent of as can be seen from his Law of Comparative Advantage. One of Ricardo’s first interactions in the economic dialogue of his time was based around the Quantity Theory of Money. At the time there was something going on in Britain that would come to be known as the â€Å"Bullion Controversy†. Basically, as a result of a potential war the British government temporarily suspended the obligation of the Bank of England to convert its notes into gold. During this time agricultural prices rose (which some people attributes to poor harvests) and gold prices went up. It is on this second point that Ricardo chimed in. Ricardo argued that the rise in gold prices was actually the result of inflation. According to him, since the bank wasn’t obligated to exchange their notes for gold they were printing more notes than they had gold to back them. This flood of currency, Ricardo said, was creating an excess supply which was devaluing the currency and thus causing inflation (Laidler, p. 12). Karl Marx Karl Marx is probably best known for the work that he co-authored with Fredrick Engels entitled â€Å"The Communist Manifesto† and also for his work entitled â€Å"Capital.† He is also arguably one of the most well-known of the Classical Economists, or of any