Ricardo on Agricultural Improvements: a Note
| Author | Heinz D. Kurz,Christian Gehrke,Neri Salvadori |
| Published date | 01 August 2003 |
| Date | 01 August 2003 |
| DOI | http://doi.org/10.1111/1467-9485.5003002 |
RICARDO ON AGRICULTURAL
IMPROVEMENTS:
ANOTE
Christian Gehrke
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, Heinz D. Kurz
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and Neri Salvadori
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Abstract
This note discusses the numerical examples of land saving and capital saving
agricultural improvements Ricardo provided in the chapter on the rent of land in
the Principles. Especially his illustration of the second kind of improvements met
with fierce criticism. It is argued that Ricardo was not wrong in any substantive
sense and that he could only be criticized for having changed the definition of rent
as regards the timing of its payment from post to ante factum.
I Intro ductio n
Ricardo’s discussion of different forms of technical progress and their
implications for the distribution of the product between workers, capitalists
and landlords in Chapter 2 of the Principles (Ricardo, [1817] 1951) attracted the
attention of major economists, including John Stuart Mill, Marx, Marshall and
Wicksell. However, the numerical examples he put forward to illustrate what we
may, for short, call ‘land saving’ and ‘capital (alias labour) saving’ technical
progress generally met with fierce criticism. According to Edwin Cannan,
Ricardo ‘is absolutely and almost obviously wrong’ with regard to the second
kind of improvements and his reasoning is said to end ‘in complete and hopeless
failure’ ([1893] 1967, pp. 259–60). Essentially the same criticism was reiterated
some fifty years later by Harry G. Johnson who called Ricardo’s second
numerical example ‘erroneous’ (Johnson, 1948, p. 792).
1
In this note we shall argue that Ricardo was not wrong in any substantive sense.
He could only be criticized for having changed the definition of rent, which implied a
change as regards the timing of its payment from post to ante factum,when
proceeding from one numerical example to the next; alas, without explicitly noting,
nor perhaps even noticing, the implication. We shall begin, in Section II, with a
summary account of Ricardo’s argument. Section III then provides an interpretation
of Ricardo’s two numerical examples in which each of them emerges as fully correct.
n
University of Graz
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University of Graz
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University of Pisa
1
Cannan’s criticism of Ricardo’s second example was also shared by Mark Blaug ([1967]
1997, p. 113), Denis O’Brien (1975, pp. 128–9) and Paul A. Samuelson (1977, p. 521).
Scottish Journal of Political Economy, Vol. 50, No. 3, August 2003
rScottish Economic Society 2003, Published by Blackwell Publishing, 9600 Garsington Road, Oxford OX4 2DQ, UK
and 350 Main Street, Malden, MA 02148, USA
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