John Maynard Keynes (1883-1946)

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David Ricardo (1772–1823)

David Ricardo was born on 19 April 1772 in London. He was the third son (out of seventeen!) of a Dutch Jew who had made a fortune on the London Stock Exchange. At the age of fourteen, after a brief schooling in Holland, Ricardo's father employed him full-time at the London Stock Exchange, where he quickly acquired a knack for the trade. At 21, Ricardo broke with his family and his orthodox Jewish faith when he decided to marry a Quaker called Priscilla Anne Wilkinson; Ricardo then converted to Christianity. His family disinherited him for marrying outside his Jewish faith.

Ricardo had to establish his own business. He continued as a member of the stock exchange, where his ability won him the support of an eminent banking house. He did so well that in a few years he acquired a fortune. This enabled him to pursue his interests in literature and science, particularly in mathematics, chemistry, and geology.

He became rich in a very short time. When he died, his estate was worth over $100 million in today's dollars.

In 1799 he read Adam Smith’s Wealth of Nations and got excited about economics. So for the next ten years he studied economics. Bright and talkative, Ricardo discussed his own economic ideas with his friends, notably James Mill. But it was only after the persistent urging of the eager Mill that Ricardo actually decided to write them down. In 1809 he wrote that England's inflation was the result of the Bank of England's propensity to issue excess bank notes. In short, Ricardo was an early believer in the quantity theory of money, or what is known today as monetarism.

In 1814, at the age of 42, Ricardo retired from business and took up residence at Gatcombe Park in Gloucestershire, where he had extensive landholdings. In 1819 he became MP for Portarlington. He did not speak often but his free-trade views were received with respect, although they opposed the economic thinking of the day. Parliament was made up of landowners who wished to maintain the Corn Laws to protect their profits. In 1815 Ricardo responded to the Corn Laws by publishing his Essay on the Influence of a Low Price of Corn on the Profits of Stock, in which he argued that raising the duties on imported grain had the effect of increasing the price of corn and hence increasing the incomes of landowners and the aristocracy at the expense of the working classes and the rising industrial class. He said that the abolition of the Corn Laws would help to distribute the national income towards the more productive groups in society.

In 1817, Ricardo published Principles of Political Economy and Taxation in which he analyzed the distribution of money among the landlords.

David Ricardo formalized the Classical system more clearly and consistently than anyone before had done. For his efforts, he acquired a substantial following in Great Britain and elsewhere – what became known as the "Classical" or "Ricardian" School. His system, however, was improved very little by his disciples. Perhaps only John Stuart Mill (1848) and Karl Marx (1867–94) added insights of any great weight.

He died on 11 September at Gatcombe Park (which is now the home of the Princess Royal and her family). He was 51.

The English economist John Maynard Keynes is regarded as the originator of modern macroeconomics.

In 1935 George Bernard Shaw received a letter from John Maynard Keynes in which Keynes asserted, “I believe myself to be writing a book on economic theory, which will largely revolutionize… the way the world thinks about economic problem”. And, in fact, Keynes’s The general theory of employment, interest and money (1936) did revolutionize economic analysis and established Keynes as one of the most influential economists of all time.

The son of an eminent English economist, Keynes was educated at Eton and Cambridge. While his early interests were in mathematics and probably theory, Keynes ultimately turned to economics.

Keynes was far more than an economist. He was an active, many-sided man who also played such diverse roles as principal representative of the Treasury at the World War I Paris Peace Conference, a director of the Bank of England, trustee of the National Gallery, editor of the Economic Journal. He also ran an investment company, organized the Camargo Ballet (his wife, Lydia Lopokova, was a renowned star of the Russian Imperial Ballet), and built the Art Theatre at Cambridge.

In addition Keynes found time to amass a $2 million personal fortune by speculating in stocks, international currencies, and commodities. He was also a leading figure in the “Bloomsbury Group”, an avantgarde of intellectual luminaries who greatly influenced the artistic and literally standard of England.

Most importantly, Keynes was a prolific scholar. His book encompassed such widely ranging topics as probably theory, monetary economics, and the economic consequences of the World War I peace treaty. His magnum opus, however, was the General Theory, which was described as “a work of profound obscurity, badly written and prematurely published”. Yet the General Theory attacked the classical economists’ contention that recession will automatically cure itself. Keynes’ analysis suggested that recession could easily spiral downward into a depression. Keynes claimed that modern capitalism contained no automatic mechanism which would propel the economy back towards full employment. The economy might languish for many years in depression, and the depression of the 1930s seemed to provide sufficient evidence that Keynes was right. His basic policy recommendation – a starting one in view of the balanced-budget sentiment at the time – was for government in these circumstances to increase its spending to include more production and put unemployed back to world.

	Adam Smith	David Ricardo	John Maynard Keynes
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