An Inquiry into the Wealth of Nations by Adam Smith

40 years after the publication of Adam Smith’s “An Inquiry into the Wealth of Nations” during the early 19th century, the rivalry between the Capitalists and the Landlords was at its peak. Thomas Robert Malthus had lived through two conflicts one the Industrial Revolution, and the Control of landowners over Parliament. Malthus wrote an essay on the theory of population where he challenged England’s poor laws. On the other hand David Ricardo believed that the Malthusian position regarding the Corn Laws was wrong as Ricardo believed that countries don’t benefit from protectionist policies like the Corn Laws; however, they benefit from trade and globalization. In a protectionist society, profits fall while rents rise; to Ricardo this was a catastrophe. The wars that England fought affected its food imports and price of grains.

This forced Capitalists to pay higher wager, and British goods became more efficient on the International level. During the Corn Laws era, the Capitalists dominated the economy while the landlords controlled the parliament. Ricardo’s iron law of wages states that wages must remain at a constant level “labor’s natural price” Capitalists had to pay high wages to their workers; therefore, they found out that it was easier to start importing grains. On the other hand, landlords resented imports because they depressed prices and profits of their grains. The landlords controlled the parliament; accordingly, the Corn Laws passed in Parliament and were effective until their elimination in 1846. “In 1815, with the long series of wars over, the corn laws became one of the most critical political issues facing the British Parliament. The landlord class used all of its social, intellectual, and political influences to obt...

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...rary, those which have the greatest value in exchange have frequently little or no value in use. Nothing is more useful than water; but it will purchase scarce anything; scarce anything can be had in exchange for it. A diamond, on the contrary, has scarce any value in use; but a very great quantity of other goods may frequently be had in exchange for it.” (Smith Pp.30) In addition, Ricardo resembles the neoclassical theories in the sense that, he believes that liberalizing the market in order for the forces of supply and demand to take control would benefit both consumers and producers and the society as a whole; Ricardo was an advocate of free trade and wanted to abolish the Corn Laws. On the other hand, Malthus can be seen as being a protectionist in the modern era, as he wanted to protect the “status-quo” and didn’t want to introduce any dangers in the market.