By : Felipe Argote
We can not finish developing the most relevant aspects of the liberal model if we do not include David Ricardo. The English economist who lived a few years after Adam Smith. He was not interested in economics until he read while on vacation with his wife, the writings of Adam Smith at the age of 37. From David Ricardo I could say that the history of her family tree is the story of the evolution of financial activity. His ancestors were Sephardic Jews expelled from Portugal as the thousands who left Spain first ant then Portugal, been persecuted by the Inquisition of the Catholic Church which began Torquemada and Ferdinand and Isabella, the Catholic monarchs of Spain. They signed the Granada decree that expelled 200,000 Spanish Jews by not wanting to convert to Christianity and who took with them the knowledge of the business of usury. Ricardo's ancestors went to Holland where they were developed in the lending business that used in Spain and Portugal and then evolve into other financial activities that led eventually to the emergence of banks. Then his nearest ancestors moved to England on the trail of bank activity in the Netherlands moved to London. Here his father was to work on the stock exchanges in London, where he took his son David to work at fourteen. All those years generation after generation, being faithful to their religious principles irrespective of the anti-Semitic persecutions, ended by the marriage, outside the Jewish faith, of David Ricardo with an English Quaker. This could not stand the mother of Ricardo and his sixteen brothers, so she never spoke to him again until the day of his death.
David became very rich in the business of the stoke exchange at an early age. He became interested in economics after the age of forty when he began his writing through letters to newspapers.
In 1917 he published his book "Principles of Political Economy and Taxation". A David Ricardo is credited his theoretical contribution in the so-called law of comparative advantage. It deepens the work of Adam Smith explained that we remember the law of absolute advantage. Ricardo despite sustained that a country could be more efficient than another in some or all products, yet it is beneficial specialization and exchange through international trade. So that the country with the greatest advantage has to specialize in that product in which their advantage was greater and import the product while being more efficient than the difference in efficiency is lower. For example if England is more efficient at producing wine and cheese that Portugal with England 3 workers can produce 12 bottles of wine and 5 cheeses in a number of hours and Portugal on the other hand can produce 4 wines and 4 cheese at the same time with the same number of workers, then England should specialize in the production of wine and leave for Portugal to produce the cheese may be even more efficient. This is because if England wants to produce both import and not have to divide workers. In this case use 2 to produce wine reaching a level of 12 bottles and one to produce cheese, cheese producing 5. Instead Portugal produces an equal number of workers with 4 bottles of wine and 4 cheeses.
If England is specialized, they will produce 18 wines, while Portugal will produce 12 cheeses. England exchanges 5 bottles of wine for 7 cheeses with Portugal. So England will then have 13 bottles of wine and 7 cheeses and Portugal achieved 5 bottles of wine and 5 cheeses. In this case England won 1 bottle of wine and 2 cheeses and Portugal won 1 bottle of wine and 1 cheese.
David Ricardo was a member of the House of Commons of the English parliament until the day he died at the age of 51 and amassed a large fortune.