The economists gave little comfort to the workers. Thomas Malthus, in An Essay on the Principle of Population (1798), explained that it is useless to raise wages, for this would lead to larger families, increasing the pressure of population upon the food supply, and would soon restore the poverty that must forever result from the natural inequality of men.21 In a revised but impenitent form (1803) of his famous essay Malthus laid down his own “iron law of wages”: “The wages of labour will always be regulated by the proportion of the [labor] supply to the demand.”22 In Principles of Political Economy (1820) he warned that thrift might be carried to excess, since it would reduce investment and production; he defended “rents” (the returns from property investments) as “the reward of present valour and wisdom, as well as of past strength or cunning;”23 and he agreed with Voltaire that the luxuries of the rich have the good effect of providing employment for skilled artisans. In a liberal moment he recommended public works as a mitigation of unemployment in periods of reduced production.
David Ricardo accepted the theorems of his friend Malthus, and built upon them his own Principles of Political Economy and Taxation (1817), which remained for half a century the classical text of what Carlyle was to call “the dismal science.”24 Son of a Dutch Jew who had prospered on the London Stock Exchange, he was converted to Unitarian Christianity, married a Quaker girl, established his own brokerage firm, made a fortune, retired from business (1815), and wrote several recondite treatises, especially on finance. In 1819 he was elected to the House of Commons, where he denounced Parliamentary corruption, defended free assembly, free speech, free trade, trade unions, and warned the capitalists to watch out lest the landlords of Britain, by their power to raise rentals, should sooner or later absorb the gains of industry. In his epochal treatise he argued that a rise in wages is never real, since it will soon be canceled by a rise in prices due to the increased cost of production; that the proper wage of the laborer is the amount he needs to subsist and perpetuate (without increasing) his species. Ricardo left a mite for Marx by defining the value (not the price) of a commodity by the amount of labor required for its production.
He was not as dismal as his science. He and Malthus remained fast friends to the end, though often disagreeing in private and in print. When both of them had died (Ricardo in 1823, Malthus in 1834), Sir James Mackintosh (a surviving gleam of the Scottish Enlightenment) said of them, and of their common source: “I have known Adam Smith slightly, Ricardo well, and Malthus intimately. Is it not something to say for a science that its three greatest masters were about the three best men I ever knew? “25