His most famous work, however, became The Principles of Political Economy and Taxation. Here, he provided his biggest contributions to economic philosophies today.
His two biggest contributions include two key economic theories, which are his theory concerning rent and his theory of comparative advantage. His theory with rent defined rent as the landlord's income and the return from differences in cost between productive and less-productive land; his theory also added that society only had three classes, which were worker, capitalist, and landlord, and also concluded that the landlord benefited the most out of the three classes. Therefore, the conclusion was that profits varied inversely with wages, which move with the cost of necessities, and that rent increased as population increased as well. He believed that if population grew too rapidly, it would decrease wages to barely subsistent levels and reduce profits.
His theory of comparative advantage became the fundamental idea for international trade. He believed that if each nation produces the good that they can make most efficiently, all nations would benefit in the end by trading for goods most efficiently produced by other nations. Therefore, a nation does not have to try to produce everything it needs. It should obviously produce what it does best and trade with other nations for the products that that nation does best. Although Ricardo was known during his time for his theories, he shared the spotlight with his contemporary, Thomas Malthus. Thomas Malthus born in England on February 13,1766, and born into a rather wealthy family as Ricardo was. His parents mostly educated him until he went to Jesus College where he graduated in 1788. After graduating, he became a curate of the Church of England. He lived a quiet life along with his wife Harriet. He became close friends with David Ricardo and James Mill, another economist of the time.
