Table Of ContentRicardo on Money and Finance
David Ricardo, one of the major figures in the history of economic thought, particularly
in English classical political economy, pursued his career as an economist just 200 years
ago. Since then, his economic theory generally has been regarded as the culmination of
classical economics, and his name and theory have continued to exert an enduring influ-
ence up to the present day. This book, consisting of chapters contributed by historians
specializing in economic thought on money and finance, aims to reappraise Ricardo’s
monetary and financial thought in its bicentenary, and to offer some historical clues to
understanding the current world-w ide financial crisis.
This volume consists of nine chapters, which are grouped into three parts. The first
part is devoted to the historical background of Ricardo’s economic thought (the work of
Hume, Smith, Thornton, etc.). It serves to highlight the originality of Ricardo’s thought in
a historical context. The second and central part consists of four chapters discussing the
most important aspects of Ricardo’s monetary thought, i.e. Ricardo and the Quantity
Theory of Money; the ideal monetary regime conceived by Ricardo very early in his
career and refined throughout his life; and his plan for the establishment of a national
bank. In this part, the relationship between the quantity of money and its value, in
Ricardo, is examined in a new light, and Ricardo appears as a non- quantity theorist. The
two chapters in the third and last part, which deals with the period after Ricardo’s death,
discuss the issues raised in relation to Ricardo’s monetary thought.
By tracing Ricardo’s economic thought to the early nineteenth century, this book may
provide readers with insights to help them understand present-d ay financial crises.
Yuji Sato is Professor of Economics at the Shonan Institute of Technology, Kanagawa,
Japan. His previous positions include Associate Professor of Economics at Toyama Uni-
versity of International Studies, Toyama, Japan. A specialist in classical monetary theory
and in classical economics, he has published articles on Adam Smith, Thomas R. Malthus,
David Ricardo, and the history of monetary thought. He is the co-e ditor of Money and
Finance in the History of Economic Thought.
Susumu Takenaga spent two years in Paris studying for a doctorate at Paris University
X in Nanterre after obtaining a Master’s degree at the Faculty of Economics of Osaka
City University. He received his PhD in Economics in 1984 with a dissertation on the
theory of value of Marx in relation to classical theory. He has been a professor at Daito-
bunka University in Tokyo since 1996, teaching the history of economics. His research
interests are in English classical economics, including Smith and Ricardo; Marx and the
history of Marxism; and also Keynesian and post-K eynesian economics.
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Ricardo on Money and Finance
A bicentenary reappraisal
Edited by Yuji Sato and
Susumu Takenaga
First published 2013
by Routledge
2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN
Simultaneously published in the USA and Canada
by Routledge
711 Third Avenue, New York, NY 10017
Routledge is an imprint of the Taylor & Francis Group, an informa business
© 2013 selection and editorial material Yuji Sato and Susumu Takenaga;
individual chapters, the contributors
The rights of Yuji Sato and Susumu Takenaga to be identified as the
authors of the editorial material, and of the authors for their individual
chapters, have been asserted in accordance with sections 77 and 78 of the
Copyright, Designs and Patents Act 1988.
All rights reserved. No part of this book may be reprinted or reproduced or
utilized in any form or by any electronic, mechanical, or other means, now
known or hereafter invented, including photocopying and recording, or in
any information storage or retrieval system, without permission in writing
from the publishers.
Trademark notice: Product or corporate names may be trademarks or
registered trademarks, and are used only for identification and explanation
without intent to infringe.
British Library Cataloguing in Publication Data
A catalogue record for this book is available from the British Library.
Library of Congress Cataloging in Publication Data
Ricardo on money and finance : a bicentenary reappraisal / edited by
Yuji Sato and Susumu Takenaga.
pages cm.
Includes bibliographical references and index.
1. Ricardo, David, 1772–1823. 2. Money. 3. Monetary policy.
4. Finance. I. Sato, Yuji. II. Takenaga, Susumu.
HB103.R5R54 2013
332–dc23
2012048569
ISBN: 978-0-415-81467-6 (hbk)
ISBN: 978-0-203-79731-0 (ebk)
Typeset in Times New Roman
by Wearset Ltd, Boldon, Tyne and Wear
Contents
List of figures and tables vii
List of contributors viii
Acknowledgements ix
Introduction: Ricardo’s monetary thought 200 years on 1
YUJI SATO AND SUSUMU TAKENAGA
PART I
Ricardo’s monetary theory in a historical context 13
1 Monetary disequilibrium and the demand for money in
Ricardo and Thornton 15
DAvID GLASNER
2 Prices, value and seigniorage in Ricardo’s monetary
economics 30
JéRôME DE BOYER DES ROCHES
3 Old and new interpretations of classical monetary theory 53
YUJI SATO
PART II
Aspects of Ricardo’s theory of money and finance 75
4 The value of money: labour theory of value and quantity
theory in Ricardo’s economic theory 77
SUSUMU TAKENAGA
5 The role of the standard in Ricardo’s theory of money 115
GHISLAIN DELEPLACE
vi Contents
6 Interest rates, banking theory and monetary policy in
Ricardo’s economics 124
SYLvIE DIATKINE
7 Ricardo’s theory of central banking: the monetary system
and the government 147
TOSHIAKI OTOMO
PART III
The aftermath of Ricardo’s monetary thought 177
8 Ricardo versus Tooke: on the enduring value of their
respective monetary theories to classical economics 179
MATTHEW SMITH
9 Interwar reflections on the balance of payments: Taussig
and the influence of the Ricardian bullionist tradition 198
FLORENCIA SEMBER
Index 219
Figures and tables
Figures
2.1 The relative values of guineas and bullion 39
2.2 The quantity of money and the value of money 43
3.1 A nation’s money supply and the magnitudes of credit 59
7.1 The composition of government paper 169
9.1 The gold- points mechanism 200
Tables
3.1 Three frameworks of monetary theory 58
3.2 Balance sheet of the Bank of England (1815) 67
9.1 Final results in convertible and inconvertible cases (US) 204
Contributors
Jérôme de Boyer des Roches, Senior Lecturer, Université de Paris IX, LEDa-
SDFi, Paris, France.
Ghislain Deleplace, Professor, Université de Paris vIII, LED, Paris, France.
Sylvie Diatkine, Professor, Université de Paris Est, PHARE, Paris, France.
David Glasner, Economist, Federal Trade Commission, Washington, DC,
United States.
Toshiaki Otomo, Professor, Rikkyo University, Tokyo, Japan.
Yuji Sato, Professor, Shonan Institute of Technology, Yokohama, Japan.
Florencia Sember, CONICET (National Commission for Scientific and Techno-
logical Research) and University of Buenos Aires, Buenos Aires, Argentina.
Matthew Smith, Lecturer, University of Sydney, Sydney, Australia.
Susumu Takenaga, Professor, Daitobunka University, Tokyo, Japan.
Acknowledgements
The chapters in this book are composed of a selection of papers arranged in a
coherent manner. They were each presented at one of two international confer-
ences held in Tokyo in September 2011 and Kyoto in March 2012, on the same
subject as the title of this book, i.e. ‘Ricardo on Money and Finance’. They are
part of a series of seminars and conferences organized under the auspices of the
Ricardo Society, founded in the year 2000 in Tokyo by a group of Japanese
scholars. The Society aims to promote the study of David Ricardo’s theory and
thought together with various authors’ writings related to these topics, and, in
particular, to encourage PhD students and young scholars. Since its establish-
ment, the Society has been trying to develop international relations and coopera-
tion with foreign researchers who share our study interests. We are continuing to
further these collaborations, with the aim of internationalizing our research activ-
ities and the Ricardo Society itself.
In April 2010, we were able to obtain a Grant- in-Aid for Scientific Research
from the Japanese Society for the Promotion of Science (JSPS) for a period of five
years. This has enabled us to hold seminars and conferences every year, and to
invite renowned researchers from various countries. The publication of this book in
English, the first outcome of our recent tentative efforts, was made possible only
with the help of this JSPS funding. Without the active participation of the Japanese
members of the Society and of the invited foreign researchers, who took part in
discussions in seminars and at conferences, agreed to contribute their papers to this
collection, and helped us to contact the publisher, etc., this book could never have
seen the light of day. In particular, without the devoted leadership of the main organ-
izer of the five-y ear project, Professor Masashi Izumo, this book would never have
been published. We would like to thank all of the conference participants. At the
same time, we hope that this first book will soon be followed by further volumes.
The main reference sources for this work are naturally Ricardo’s economic
writings. In every chapter of our volume, we present quotations from Ricardo’s
Works and Correspondence edited by Piero Sraffa, which was originally pub-
lished by Cambridge University Press. The Liberty Fund in the USA, which now
controls the copyright, has generously granted us permission to use the materials
contained in Works and Correspondence. Last but not least, we would like to
express our gratitude to the Fund.
