ABSTRACT
Adam Smith's optimistic vision was not to survive for more than one generation. Ricardo's modification of Smith's model went into another direction. He was the first to build his entire system on the Law of Decreasing Returns on Land, on which Malthus had based his population theory. Technology and its changes dominate the system's motion even more strongly than in Smith's model. The state of the labor market is no longer left to the play of a biological urge. In Karl Marx's famous words: "Centralization of the means of production and socialization of labor at last reach a point where they become incompatible with their capitalist integument. This integument is burst asunder". As is the case with Smith's model, the closed spiral linkage of events in Marx's system is due to the absorption of the social into the economic process.
