Editing David Ricardo (section)

==Influence and intellectual legacy==
David Ricardo's ideas had a tremendous influence on later developments in economics. US economists rank Ricardo as the second most influential economic thinker, behind Adam Smith, prior to the twentieth century.<ref>Davis, William L., Bob Figgins, David Hedengren, and Daniel B. Klein. "Economics Professors' Favorite Economic Thinkers, Journals and Blogs (along with Party and Policy Views)", ''Econ Journal Watch'' 8(2): 126–146, May 2011 [http://econjwatch.org/articles/economics-professors-favorite-economic-thinkers-journals-and-blogs-along-with-party-and-policy-views].</ref>

===Ricardian socialists===
{{main|Ricardian socialism}}

Despite his laissez-faire capitalist views, Ricardo's writings fascinated a number of early socialists in the 1820s, who thought his value theory had radical implications. They argued that, in view of labour theory of value, labour produces the entire product, and the profits capitalists get are a result of exploitations of workers.<ref>Landreth Colander 1989 ''History of Economic Thought'' Second Edition, p.137.</ref> These include [[Thomas Hodgskin]], [[William Thompson (philosopher)|William Thompson]], [[John Francis Bray]], and [[Percy Ravenstone]].

===Georgists===
[[Georgists]] believe that rent, in the sense that Ricardo used, belongs to the community as a whole. [[Henry George]] was greatly influenced by Ricardo, and often cited him, including in his most famous work, ''[[Progress and Poverty]]'' from 1879. In the preface to the fourth edition he wrote: "What I have done in this book, if I have correctly solved the great problem I have sought to investigate, is, to unite the truth perceived by the school of Smith and Ricardo to the truth perceived by the school of Proudhon and Lasalle; to show that laissez faire (in its full true meaning) opens the way to a realization of the noble dreams of socialism; to identify social law with moral law, and to disprove ideas which in the minds of many cloud grand and elevating perceptions."<ref>[[Henry George|George, Henry]], ''[[Progress and Poverty]]''. Preface to the 4th Edition, November 1880.</ref>

===Neo-Ricardians===
After the rise of the 'neoclassical' school, Ricardo's influence declined temporarily. It was [[Piero Sraffa]], the editor of the Collected Works of David Ricardo<ref>Piero Sraffa and M.H. Dobb, editors (1951–1973). ''The Works and Correspondence of David Ricardo''. Cambridge University Press, 11 volumes.</ref> and the author of seminal ''Production of Commodities by Means of Commodities'',<ref>Sraffa, Piero 1960, ''Production of Commodities by Means of Commodities: Prelude to a Critique of Economic Theory''. Cambridge University Press.</ref> who resurrected Ricardo as the originator of another strand of economic thought, which was effaced with the arrival of the neoclassical school. The new interpretation of Ricardo and Sraffa's criticism against the marginal theory of value gave rise to a new school, now named neo-Ricardian or Sraffian school. Major contributors to this school include [[Luigi Pasinetti]] (1930–2023), [[Pierangelo Garegnani]] (1930–2011), [[Ian Steedman]] (1941–), [[Geoffrey Harcourt]] (1931–2021), [[Heinz Kurz]] (1946–), [[Neri Salvadori]] (1951–), [[Pier Paolo Saviotti]] (–) among others. See also [[Neo-Ricardianism]]. The Neo-Ricardian school is sometimes seen to be a component of [[Post-Keynesian economics]].

====Neo-Ricardian trade theory====
Inspired by [[Piero Sraffa]], a new strand of trade theory emerged and was named neo-Ricardian trade theory. The main contributors include [[Ian Steedman]] and [[Stanley Metcalfe (trade theorist)|Stanley Metcalfe]]. They have criticised neoclassical international trade theory, namely the [[Heckscher–Ohlin model]] on the basis that the notion of capital as primary factor has no method of measuring it before the determination of profit rate (thus trapped in a logical vicious circle).<ref>{{cite book |editor-last=Steedman |editor-first=Ian |year=1979 |title=Fundamental Issues in Trade Theory |location=London |publisher=MacMillan |isbn=0-333-25834-7}}</ref><ref>{{cite book |last=Steedman |first=Ian |title=Trade Amongst Growing Economies |publisher=Cambridge University Press |location=Cambridge, UK |year=1979 |pages={{Page needed |date=April 2011}} |isbn=0-521-22671-6 |url-access=registration |url=https://archive.org/details/tradeamongstgrow0000stee }}</ref> This was a second round of the [[Cambridge capital controversy]], this time in the field of international trade.<ref>{{cite book |first=Chris |last=Edwards |year=1985 |title=The Fragmented World: Competing Perspectives on Trade, Money, and Crisis |location=London and New York |publisher=Methuen & Co. |chapter=§&nbsp;3.2 The 'Sraffian' Approach to Trade Theory |pages=48–51 |isbn=0-416-73390-5}}</ref> Depoortère and Ravix judge that neo-Ricardian contribution failed without giving effective impact on neoclassical trade theory, because it could not offer "a genuine alternative approach from a classical point of view."<ref>Christophe Depoortère, Joël Thomas Ravix; "The classical theory of international trade after Sraffa". ''Cahiers d'économie Politique / Papers in Political Economy'' (69): 203–234, February 2015.</ref>

====Evolutionary growth theory====
Several distinctive groups have sprung out of the neo-Ricardian school. One is the evolutionary growth theory, developed notably by [[Luigi Pasinetti]], J.S. Metcalfe, Pier Paolo Saviotti, and Koen Frenken and others.<ref>Pasinetti, Luisi 1981 Structural change and economic growth, Cambridge University Press. J.S. Metcalfe and P.P. Saviotti (eds.), 1991, ''Evolutionary Theories of Economic and Technological Change'', Harwood, 275 pages. J.S. Metcalfe 1998, ''Evolutionary Economics and Creative Destruction'', Routledge, London. Frenken, K., Van Oort, F.G., Verburg, T., Boschma, R.A. (2004). ''Variety and Regional Economic Growth in the Netherlands – Final Report'' (The Hague: Ministry of Economic Affairs), 58 p.</ref><ref>{{citation |doi=10.1007/s00191-007-0081-5 |title=Export variety and the economic performance of countries |year=2008 |last1=Saviotti |first1=Pier Paolo |last2=Frenken |first2=Koen |journal=[[Journal of Evolutionary Economics]] |volume=18 |issue=2 |pages=201–218|hdl=1874/387420 |s2cid=154150526 |hdl-access=free }}</ref>

Pasinetti<ref>{{citation |author=Pasinetti, Luigi L. |title=Structural change and economic growth: a theoretical essay on the dynamics of the wealth of nations |publisher=Cambridge University Press |location=Cambridge, UK |year=1981 |isbn=0-521-27410-9 }}{{page needed|date=March 2022}}</ref><ref>{{citation |author=Pasinetti, Luigi L. |title=Structural economic dynamics: a theory of the economic consequences of human learning |publisher=Cambridge University Press |location=Cambridge |year=1993 |isbn=0-521-43282-0 }}{{page needed|date=March 2022}}</ref> argued that the demand for any commodity came to stagnate and frequently decline, demand saturation occurs. Introduction of new commodities (goods and services) is necessary to avoid economic stagnation.

====Contemporary theories====
{{Main|International trade theory#Ricardian trade theory extensions}}
Ricardo's idea was even expanded to the case of continuum of goods by Dornbusch, Fischer, and Samuelson<ref>{{citation |jstor=1828066 |pages=823–839 |last1=Dornbusch |first1=R. |last2=Fischer |first2=S. |last3=Samuelson |first3=P. A. |title=Comparative Advantage, Trade, and Payments in a Ricardian Model with a Continuum of Goods |volume=67 |issue=5 |journal=The American Economic Review |year=1977 |url=http://www.stanford.edu/~rstaiger/Comparativ-goods.pdf |url-status=dead |archive-url=https://web.archive.org/web/20110516042952/http://www.stanford.edu/~rstaiger/Comparativ-goods.pdf |archive-date=16 May 2011 }}</ref> This formulation is employed for example by Matsuyama<ref>{{Citation |last1=Matsuyama |first1=K. |year=2000 |title=A Ricardian Model with a Continuum of Goods under Nonhomothetic Preferences: Demand Complementarities, Income Distribution, and North–South Trade |journal=Journal of Political Economy |volume=108 |issue=6 |pages=1093–1120 |url=http://darkwing.uoregon.edu/~bruceb/Peter%20W.pdf |archive-url=https://web.archive.org/web/20120918000912/http://darkwing.uoregon.edu/~bruceb/Peter%20W.pdf |archive-date=2012-09-18 |url-status=live |doi=10.1086/317684 |s2cid=154166748 |postscript=.}}</ref> and others.

Ricardian trade theory ordinarily assumes that the [[Wage labour|labour]] is the unique input. This is a deficiency as intermediate goods occupies now a great part of international trade. The situation changed after the appearance of [[:ja:塩沢由典|Yoshinori Shiozawa]]'s work of 2007.<ref>{{cite journal |last=Shiozawa |first=Y. |year=2007 |title=A New Construction of Ricardian Trade Theory: A Multi-country, Multi-commodity Case with Intermediate Goods and Choice of Production Techniques |journal=Evolutionary and Institutional Economics Review |volume=3 |issue=2 |pages=141–187 |doi=10.14441/eier.3.141|s2cid=154021080 }}</ref> He has succeeded to incorporate traded input goods in his model.<ref>Y. Shiozawa (2017) The new theory of international values: An overview. Shiozawa, Oka and Tabuchi (eds.) ''A New Construction of Ricardian Theory of International Values''. Singapore: Springer. Chapter 1, pp. 3–73.</ref> His theory became more useful by the discovery of new definition of regular international values (a couple of wage rates for countries and prices for products), because it is not defined as the normal vector at a facet of world production possibility set, which is the set where all countries enjoy full employment. The new definition is given in Shiozawa and Fujimoto (2018)<ref>Shiozawa, Y., and Fujimoto, T. (2018) The nature of international competition among firms. Fujimoto and Ikuine (eds.) ''Industrial Competitiveness and Design Evolution'', Springer Japan, Tokyo. Chapter 2, pp.43–96.</ref> and in Shiozawa (2020).<ref name="Shiozawa20"/> Shiozawa's theory of international values is now the unique theory of international trade that can treat unemployment and input trade in a general form.

Yeats found that 30% of world trade in manufacturing is intermediate inputs.<ref>{{cite book |last=Yeats |first=A. |chapter=Just How Big is Global Production Sharing? |editor-last=Arndt |editor-first=S. |editor2-first=H. |editor2-last=Kierzkowski |year=2001 |title=Fragmentation: New Production Patterns in the World Economy |publisher=Oxford University Press |location=Oxford |isbn=0-19-924331-X}}</ref> Bardhan and Jafee found that intermediate inputs occupy 37 to 38% in the imports to the US for the years from 1992 to 1997, whereas the percentage of intrafirm trade grew from 43% in 1992 to 52% in 1997.<ref>{{cite book |last1=Bardhan |first1=Ashok Deo |last2=Jaffee |first2=Dwight |year=2004 |chapter=On Intra-Firm Trade and Multinationals: Foreign Outsourcing and Offshoring in Manufacturing |editor-first=Monty |editor-last=Graham |editor2-first=Robert |editor2-last=Solow |title=The Role of Foreign Direct Investment and Multinational Corporations in Economic Development }}{{verify source|date=June 2019}}</ref>

====Unequal exchange====
Chris Edward includes Emmanuel's [[unequal exchange]] theory among variations of neo-Ricardian trade theory.<ref>Chris Edwards 1985 ''The Fragmented World: Competing Perspectives on Trade, Money and Crisis'', London and New York: Methuen. Chapter 4.</ref> [[Arghiri Emmanuel]] argued that the [[Third World]] is poor because of the international exploitation{{clarify|date=January 2015}}<!-- not clear what kind of exploitation is being described here?  is he talking about slave conditions in Sudan?  or the entering into of exchange at wages lower than those of particular other countries/cities?  or what? --> of labour.<ref>{{citation |last=Emmanuel |first=Arghiri |title=Unequal exchange; a study of the imperialism of trade |publisher=Monthly Review Press |location=New York |year=1972 |isbn=0-85345-188-5 |url=https://archive.org/details/unequalexchanges0000emma/page/ }}{{page needed|date=March 2022}}</ref><!-- with no url and no page number, it is difficult to verify this source -->{{verify source|date=January 2015}}

The unequal exchange theory of trade has been influential to the (new) [[dependency theory]].<ref>{{citation |doi=10.1016/0305-750X(78)90051-7 |title=Dependency: A formal theory of underdevelopment or a methodology for the analysis of concrete situations of underdevelopment? |year=1978 |last1=Palma |first1=G |journal=World Development |volume=6 |issue=7–8 |pages=881–924}}</ref>