Concept
Ricardian socialism is a branch of classical economic thought based upon the work of the economist David Ricardo (1772–1823). The term is used to describe economists in the 1820s and 1830s who developed a theory of capitalist exploitation from the theory developed by Ricardo that stated that labor is the source of all wealth and exchange value. This principle extends back to the principles of English philosopher John Locke. The Ricardian socialists reasoned that labor is entitled to all it produces, and that rent, profit and interest were not natural outgrowths of the free market process but were instead distortions. They argued that private ownership of the means of production should be supplanted by cooperatives owned by associations of workers. This designation is used in reference to economists in the early 19th century that elaborated a theory of capitalist exploitation from the classical economic proposition derived from Adam Smith and David Ricardo stating that labor is the source of wealth. Although Ricardian socialist thought had some influence on Karl Marx's theories, there is disagreement about the extent to which this is the case. Some believe Marx rejected many of the fundamental assumptions of the Ricardian socialists, including the view that labor was the source of all wealth; while others believe the Ricardian socialists, though "generally dismissed as incoherent utopians", were in fact "an important though very largely neglected" influence on Marxist economic theories. Ricardian socialism is considered to be a form of socialism based on the arguments made by Ricardo that the equilibrium value of commodities approximated producer prices when those commodities were in elastic supply, that these producer prices corresponded to the embodied labor and that profit, interest and rent were deductions from this exchange-value. This is deduced from the axiom of Ricardo and Adam Smith that labor is the source of all value.