From The Principles of Political Economy and Taxation

David Ricardo

Chapter 14 in Readings in the Economics of the Division of Labor:The Classical Tradition, 2005, pp 127-130 from World Scientific Publishing Co. Pte. Ltd.

Abstract: AbstractThe same rule which regulates the relative value of commodities in one country does not regulate the relative value of the commodities exchanged between two or more countries.Under a system of perfectly free commerce, each country naturally devotes its capital and labor to such employments as are most beneficial to each. This pursuit of individual advantage is admirably connected with the universal good of the whole. By stimulating industry, by rewarding ingenuity, and by using most efficaciously the peculiar powers bestowed by nature, it distributes labor most effectively and most economically: while, by increasing the general mass of productions, it diffuses general benefit, and binds together, by one common tie of interest and intercourse, the universal society of nations throughout the civilised world. It is this principle which determines that wine shall be made in France and Portugal, that corn sell be grown in America and Poland, and that hardware and other goods shall be manufactured in England…

Keywords: Division of Labor; Specialization; Extent of the Market; Knowledge; Political Economy; History of Economic Thought; Increasing Returns; Equilibrium; Price System; Coordination (search for similar items in EconPapers)
JEL-codes: C1 C7 (search for similar items in EconPapers)
Date: 2005
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Citations: View citations in EconPapers (6)

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