Reading Analysis 1

David Ricardo

On the Principles of Political Economy and Taxation

Chapter 31, “On Machinery”

General Directions: Answer each of the questions below, based on your reading of the relevant paragraphs from this chapter. Answers are due at the beginning of class on Wednesday, January 24.

• You must be present in class to receive full credit for this assignment. Assignments submitted before class without accompanying class attendance will receive no more than half credit. Assignments submitted after class on Wednesday, January 24 cannot receive any credit.
• This assignment is worth 15 points. Your score will be based both on effort and “correctness” of your answers. If you don’t understand the meaning of a particular paragraph or line, you should nonetheless give your best shot at answering the question (nonsensical answers will not be rewarded, however).
• Your answers must be typed. Only typed answers will receive credit. We will discuss answers to these questions in class on Wednesday, January 24, at which time you may wish to add hand-written notes for your own clarification.
• You may work with others in completing this assignment. That is, you may discuss the ideas contained in the readings. However, each person should write up answers to these questions on his or her own. You may consult the Heilbroner book for additional thoughts.

1. When was Ricardo’s Principles of Political Economy and Taxation first published?

2. (Paragraph 31.1). What is Ricardo’s purpose in this chapter? Give an answer both in your own words and in direct quotation from the paragraph.

3. (Paragraph 31.2). What were Ricardo’s earliest thoughts on the effect of labor-saving machinery? Which of the “different classes of society” benefited from such machinery? In what way did each class benefit? Give an answer both in your own words and in direct quotation from the paragraph. Give an answer both in your own words and in direct quotation from the paragraph.

4. (Paragraphs 31.3-31.4). In what way did Ricardo change his mind? Give an answer both in your own words and in direct quotation from the paragraph.

5. (Paragraphs 31.57-31.9). What does Ricardo now think will be the effect of machinery on the laboring class? Why? Give an answer both in your own words and in direct quotation from the paragraph.

6. (Paragraph 31.10). Will the introduction of machinery be all bad? Why or why not? Give an answer both in your own words and in direct quotation from the paragraph.

7. (Paragraphs 31.25-31.29). Should the development and application of machinery be encouraged or discouraged? Why? Give an answer both in your own words and in direct quotation from the paragraph.

Bonus Question. This question doesn’t necessarily have anything to do with this Chapter by David Ricardo, though it may (or may not) be related to Adam Smith’s discussion of parsimony, frugality, and prodigality. It’s mostly just a general Economics question. There may be more than one correct answer.

Killing Floor by Lee Child is a novel in which a counterfeiting operation takes over a small Georgia town. The hero, who just happens to be wandering through town, gets caught up in the whole mess when he notices that, despite its neat, clean, and prosperous appearance, the town’s businesses are surprisingly quiet. For example, there’s hardly anybody in the attractive new diner on the edge of town. There are no lines of people going into and out of the shops. He goes into a barbershop and learns he’s the first customer they’ve had in days. He wonders how all of these shops can remain in business if there are no customers. One of the barbers tells him, in very hush-hush fashion, that the barbershop and presumably other businesses in town get $1000 per week from “The Foundation.” The hero eventually discovers that this Foundation is actually counterfeiting hundreds of millions of dollars of U.S. currency, and so he kills a bunch of people and saves the day while preserving the American way of life.

OK, so it makes for an entertaining story. But there’s something about the economics of this story that is just plain wrong. What is it? You don’t need to read the book to find – all you need to know is in the synopsis above.