| This question <18|18> overall <17|19> Tyler: <1131|77>. |
| Question 79: Why did Ricardo's discovery of the determination of value by labor attract the following critique: “Mr. Ricardo's system is one of discords … its whole tends to the production of hostility among classes and nations … His book is the true manual of the demagogue, who seeks power by means of agrarianism, war and plunder.” |
| [18] Tyler: Ricardo - Labor Theory of Value. I believe Ricardo's introduction of the labor theory of value (LTV) attracted the mentioned critique because of the social economic change it could potentially induce. It was a threat to the current status quo of economic segregation and existence of classes based on one's wealth. If proponents started demanding compensation in line with LTV, this would initiate a tremendous struggle between those benefiting from the current system and those being exploited by it. This fear is explicitly stated in the critique: “its whole tends to the production of hostility among classes...” |
| Ricardo's book is referred to as a “manual of the demagogue”, and perhaps rightfully so. By definition, a demagogue is a person who gains popularity by arousing the emotions, passions, and prejudices of the people. Though it was clearly used in a negative context here, this description can be translated as being somewhat accurate and supportive of the theory if the passions/emotions of the people are justified. Furthermore, the majority of the populace during this time was in the lower-to-middle classes, and thus acting as a demagogue in this sense could be viewed as acting in the interests of the many (“the people”; who also happen to be the oppressed). |
| To conclude, I think Ricardo's quote drew such a negative critique because of the fear created in those who would be diminished in property and wealth gained by an economic system other than LTV. Claiming that such an economic system would be accompanied by war and plunder was clearly an attempt to suppress an idea with potential to appeal to the have-nots, the “many”. |
| Hans: The LTV raises the question why the workers, who produce all the value, only get such a small part of it. |
| BTW in your last sentence you had “appease to,” but I think you meant “appeal to” and changed it. |
| Obi: From a historical standpoint, classical economists like Ricardo and his contemporaries realized that the “interests of the landowning class (capitalists) were permanently opposed to the interests of all other classes in Society” (paraphrased from EK Hunt's History of Economic Thought). This conflict wrought dicord and hostility among classes and nations. I like Tyler's [18] answer and would add that whereas both Ricardo and Marx understood the class conflict inherent in the capitalist system, Ricardo choose not to answer his moral duty to question the status quo, probably because he benefitted tremedously as a stock broker and later as a Member of Parliament. On the contrary, Marx rose to challenge the system, and consequently, his ideology is reviled to this day. |
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