The Classical Economists

The classical economists pioneered a new way of thinking about the uniquely human tendency to produce, trade, consume, and accumulate. Adam Smith (17231790) explained how the division of labor expands productive power and argued for freedom in economic affairs; Smith attempted to explain the basis of value, prices, the role of money, and other important concepts related to prosperity and an improved standard of living for all members of society. David Ricardo (17721823), a London stockbroker, developed the concept of diminishing returns, the wagesfund doctrine, and classical rent theory. Another classical theorist, Thomas Malthus (17761834), proposed that workers are doomed to subsistence wages, because populations increase geometrically while food production increases arithmetically. Other classical economists, including James Mill, John Stuart Mill, and Nassau Senior, extended and refined classical economics to meet new controversies and ideas throughout the nineteenth century.