Money, Banks and Finance in Economic Thought

David Ricardo on Poverty

Gehrke Christian, University of Graz

This paper re-examines David Ricardo’s views on the causes and cures of poverty. Those views can be inferred from his statements and activities in three different but inter-related roles: from his writings as an economic theorist, from his speeches and activities as a member of Parliament and parliamentary commissions, and from his engagements in charitable institutions as a wealthy stock-jobber-turned-landowner. Ricardo’s engagement with this theme as an economic theorist relates mainly to the determinants of the long-term trend of real wages and to the short-term effects of economic crises or “national distress” on the working class. For Ricardo, in the long term the reduction of poverty is conditional upon capital accumulation, economic growth and technical change in conditions of free international trade. Ricardo’s general stance on issues of social policy and poor relief can be explained by the underlying theoretical principles of his political economy noted above and by his adherence to the Malthusian population theory. Ricardo was strongly opposed to all forms of government intervention that might encourage an increase in population and thus destroy any prospect of improved living standards for the working classes. This is reflected in his political activities as a Member of Parliament and various parliamentary committees and in his attitude to poor relief and poor law reform. The paper re-examines Ricardo’s views on the old English poor laws and the Speenhamland system, his position on Robert Owen’s plans, on child labour legislation, the combination laws, public works programs, and on social policy issues more generally. Finally, it discusses the importance of Ricardo’s change of mind on the machinery question for his attitude to the demands of the “labouring poor”.

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Keywords: David Ricardo, poverty, poor laws, machinery

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