Introduction

Abstract

David Ricardo is universally acknowledged as one of the seminal figures in the development of economic theory and policy. Modest, honest and principled – rare adjectives to apply to a businessman or a politician, and he was both – he welcomed disagreement and controversy, taking pleasure in defending his position against reasoned opposition. He was prepared to change his mind in the face of convincing arguments contrary to his own, for his aim was patently to advance knowledge. His contribution to economics has been and continues to be the subject of lively debate. This study is offered as a modest addition to the vast body of Ricardian scholarship. While there is no aspect of Ricardo’s work that has not been subject to scrutiny, his views on the public debt have received little attention of a comprehensive nature. This neglect is surprising. As I shall show, his writings and speeches on the subject of public debt are wide ranging and provide an interesting exploration of public debt issues still very much relevant today. In addition, they furnish us with a rich source of evidence regarding topics of relevance to all Ricardian scholars, including his theories of resource allocation and economic growth, the quality of his applications of analysis to practical questions, and the motives behind both his abstract reasoning and policy recommendations.

[S]ome means should be resorted to for liquidating the public debt, and in this he agreed . . . that a great sacrifice should be made. . . . [T]he sacrifice would be a temporary one, and with that view he would be willing to give up as large a share of his property as any other individual. By such means ought the evil of the national debt to be met. It was an evil which almost any sacrifice would not be too great to get rid of. It destroyed the equilibrium of prices, occasioned many persons to emigrate to other countries, in order to avoid the burthen of taxation which it entailed, and hung like a mill-stone round the exertion and industry of the country.David Ricardo, Parliamentary Speech (9 June 1819), 1951, V, pp. 20–1