Principles of Political Economy and Taxation

Running head: BOOK REVIEW
Book Review
Name of the Student
Name of the University
Author Note

BOOK REVIEW
1
Table of Contents
Introduction......................................................................................................................................4
Discussion........................................................................................................................................4
Conclusion.......................................................................................................................................4
Reference list...................................................................................................................................4

BOOK REVIEW
2
Introduction
David Ricardo, the author of “Principles of Political Economy and Taxation’, is a
renowned classical economist. The central idea of the book is to discuss the functions of rent,
profit and wage in respect of land, capital and labor respectively. The book highlights some
major economic concerns related to the distribution of the limited economic resources to
different classes of the society. According to the author, distribution strategy is a vital issue
under the Political Economy. In this book, the author attains to fill the satisfactory information
gap on Adam Smith’s distribution theory for circular reasoning. Further, Ricardo criticizes the
economic theory of Thomas Malthus on the ‘Nature and Progress of Rent’ (Dixon 2008). The
author argues that it is difficult to determine the influential impacts of the tax system on the
communities. Meanwhile, the writer illustrates how adoption of machinery derives the country’s
comparative advantageous position in the international trade market lowering the production cost
for particular product.
Discussion
The first edition of the book published by John Murray publishes in 1817 following the
second and third edition in 1821. All the three different editions are comprised of Ricardo’s
comprehensive studies on the Political Economics and Taxation. The value of a commodity
depends on the utility and exchange value, as stated by Adam Smith. It is observed that the
commodity, such as, Gold owns the highest exchange value despite having little value in use. In
According to Smith, the absolute cost of the commodity is the key determining factor for the
exchangeable value. ‘What everything really cots to the man is the real price of good ’, as said
by Adam Smith (Gonner 1890). On the contrary, Ricardo argues that relative price should be
followed to decide the exchangeable value of the commodity. The relative price is the ratio of the