Ever yours,David Ricardo.
Gatcomb Park,16 Dec., 1817.
My dear Sir,
I believe I am within the time stated in your letter for your visit to Surr[e]y, and consequently that this will reach you there. I am sorry that you were not sufficiently loyal to give her majesty some mark of your attention at Bath[174], during your present vacation, as in that case I might have hoped to have seen you here. As it is we may probably be in London nearly at the same time. We have not yet absolutely fixed on the day for our journey, but it will not be deferred beyond the middle of next month. I hope I may see you before your return home.
I am glad to find that we may soon expect another volume[175]from your pen, although, if you attack me, I am prepared for nine tenths of our readers deciding in favour of your view of the question. I want an able pen on my side to put my opinions in a clear light, and to divest them of that appearance of paradox which they now wear. I wish I could assist you to a good title but no one is more able to give a work the best air and arrangement than yourself. Have you seen the Review of M. Say and myself in the British? In some of the remarks you would I believe agree; yet it is some consolation to me that, after designating every part of my performance absurd and nonsensical, they attack you on the subject of Rent, and say that both you and I have endeavoured to make thenature of rent, which was before so clear, obscure. Rent is nothing more than the hire paid for land. I feel delighted that they have given me so desirable a companion. In the Scotsman, a Scotch newspaper, I have been ably defended—the writer[176]has evidently understood what I meant to say, which the reviewer has not done.
I have been reading Mill's book[177]for this last week, and have got through about half of the first volume. I am not qualified to give an opinion of its merits, but I am very much pleased with it. It is very interesting, and is, I think, calculated to excite a great deal of attention, for it not only descants on the religion, manners, laws, arts, and literature, of the Hindus, but compares them with the religion, manners, etc. of other nations which the world has generally considered as much inferior to the Hindus; and, if these in the Hindus are to be deemed marks of a high state of civilization, Africa, Mexico, Peru, Persia, and China, might also lay claim to the same character. He also gives his own sentiments as to what constitutes good laws, a good religion, a high state of civilization, and shews at what a very low degree Hindostan deserves to be estimated for these acquirements[178]. The Political Economy is, I think, excellent, and the part that I have read may be considered as the author's view of the progress of the human mind. I hope it will bring him fame and reputation,—his perseverance as well as his other qualities well deserve it....
Like the Patriarchs of old I am surrounded by all my descendants, sons, daughters and grandchildren—they have assembled from all quarters to visit us, and if I were not afraid that they would soon become too numerous for the limits of our house I should insist on its being an annual custom.
You have probably seen in the papers that I am gazettedas one of the three from whom the choice of Sheriff is to be made, and as Col. Berkeley, the first named, will in all probability be excused on account of his intended application to the House of Lords for the Peerage which must otherwise be given to his brother, who is nearly of age, I shall no doubt be selected. This honour I could well have dispensed with....
Ever yours,David Ricardo.
Note.—In Say's 'Œuvres Diverses' (vol. i. p. 413) is printed a letter of Ricardo to Say, dated from Gatcomb, 18th Dec. 1817. He says amongst other things: 'Since your visit to England, I have been by degrees retiring from business; and, as our debt is enormous and the price of stock very high, I have from time to time withdrawn my capital, and have laid out much of it in land.... My life is made up of successes and cares; hence I am providing for the future as much as I can, that I may get rid of anxiety altogether. Our friend Mill is about to publish his book on India, on which he has been at work for several years. With powers like his, nothing can fail to become interesting and instructive under his pen; and I am convinced that this book will exceed the expectations of his closest friends. It is in type; and he has kindly given me an early copy. I have read more than half of the first volume, and I hope it will produce on competent judges the same impression that it has made on me. What he says on the government, laws, religion, and manners of the country is of great weight; and the comparison he draws between the former condition of Hindostan and its present condition seems to me to decide the question of the high state of civilization attributed to the former.... YourTraité d'Economie Politiqueincreases in reputation among us, in proportion as it becomes better known. Extracts from it (and from my own book) have recently appeared in the British Review, and its merit has been recognised. I have not fared so well; the reviewer has found in my book ample material for criticisms, and hardly a single passage worthy of praise.'
Note.—In Say's 'Œuvres Diverses' (vol. i. p. 413) is printed a letter of Ricardo to Say, dated from Gatcomb, 18th Dec. 1817. He says amongst other things: 'Since your visit to England, I have been by degrees retiring from business; and, as our debt is enormous and the price of stock very high, I have from time to time withdrawn my capital, and have laid out much of it in land.... My life is made up of successes and cares; hence I am providing for the future as much as I can, that I may get rid of anxiety altogether. Our friend Mill is about to publish his book on India, on which he has been at work for several years. With powers like his, nothing can fail to become interesting and instructive under his pen; and I am convinced that this book will exceed the expectations of his closest friends. It is in type; and he has kindly given me an early copy. I have read more than half of the first volume, and I hope it will produce on competent judges the same impression that it has made on me. What he says on the government, laws, religion, and manners of the country is of great weight; and the comparison he draws between the former condition of Hindostan and its present condition seems to me to decide the question of the high state of civilization attributed to the former.... YourTraité d'Economie Politiqueincreases in reputation among us, in proportion as it becomes better known. Extracts from it (and from my own book) have recently appeared in the British Review, and its merit has been recognised. I have not fared so well; the reviewer has found in my book ample material for criticisms, and hardly a single passage worthy of praise.'
London,30th Jan., 1818[179].
My dear Sir,
During your visit in London next week I hope you will stay with us in Brook Street, and I am commissioned by Mrs. Ricardo to add her solicitations to mine to induce Mrs. Malthus to accompany you.
Lord King[180], Mr. Whishaw and you have done me a great deal of honour in making my work[181]the subject of your discussions, but I confess it fills me with astonishment to find that you think, and from what you say they appear to agree with you, that the measure of value is not what I have represented it to be; but thatnatural price, as well asmarket price, is determined by the demand and supply,—the only difference being that the former is governed by the average and permanent demand and supply, the latter by the accidental and temporary. In saying this do you mean to deny that facility of production will lower natural price, and difficulty of production raise it? Will not these effects be produced after a very short interval, although the absolute demand and supply, or the proportion of one to the other, should remain permanently the same? At any rate then demand and supply are not the sole regulators of price. I should be glad to understand what Lord King and you mean by supply and demand. However abundant the demand it can never permanently raise the price of a commodity above the expense of its production, including in that expense the profits of the producers. It seems natural therefore to seek for the cause of the variation of permanent price in the expenses of production.Diminish these and the commodity must finally fall, increase them and it must as certainly rise. What has this to do with demand? I may be so foolishly partial to my own doctrine that I may be blind to its absurdity. I know the strong disposition of every man to deceive himself in his eagerness to prove a favourite theory, yet I cannot help viewing this question as a truth which admits of demonstration and I am full of wonder that it should admit of a doubt. If indeed this fundamental doctrine of mine were proved false I admit that my whole theory falls with it, but I should not on that account be satisfied with the measure of value which you would substitute in its place.
I am sorry that you have determined not to publish this spring.
I have not seen Torrens, and do not know what his intentions are respecting the work which he promised to give to the public.
Sir James Mackintosh is indeed a great acquisition in more respects than one to your College[182]. It must be particularly agre[e]able to you.
I thank you for your congratulations on the hono[u]r [which] has been conferred on me by the appointment [to] the office of Sheriff[183], an honour which I could well have dispensed with. Under all circumstances I think it best not to offer an objection to it.
I wish you were of our party to-day. Mr. Whishaw, Mr. Smyth, Mr. Mallet, Mr. Sharp and Mr. Warburton dine with me.
I am glad that you have heard Mill's book[184]favourably spoken of. I hope it may be as well thought of by others as it is by me.
Very truly yours,David Ricardo.
London,25 May, 1818.
My dear Sir,
I have again to regret that I shall not have you as an inmate of my house on your next visit to London.... I hope, however, that you will be our daily visitors, or as often as engagements will permit. I trust that those on our part will be exhausted before you come, for at no period have I led so dissipated a life as during this season. The King of Clubs will meet on the 6th. Let me know whether Mrs. Malthus and you will favour us with your company on the 8th, as we should be glad to ask a few friends to meet you on that day.
The general opinion here is that Parliament will be dissolved immediately after the prorogation[185], but as the election in that case will interfere with the Circuit I cannot believe that ministers will choose so inconvenient a time.
To-morrow evening there is to be a long debate in the House of Lords on the Bank Restriction Bill[186], on which occasion Lord Grenville means to speak. Lord King mentioned to me his idea of proposing that the Bank should be forbid making any dividend on their stock while the price of gold was above the mint price. I have no doubt that practically such a measure would operate a reduction of the currency and its rise to par; but, if the bank directors were obstinate, it might be attended with the most serious consequences to widows, orphans, and others, who might depend on the bank dividends only for their support.
My walks with Mill continue almost daily. I hope you will sometimes honour us with your company when inLondon. We could make a very tolerable reformer of you in six walks, if your prejudices be not too strongly fixed. Indeed I should expect to find that our differences were not very great, as, if you are favourable to reform at all and that I believe you are, we should agree on all the important principles. Sir James Mackintosh has been reading Bentham, and was just beginning to give me his opinion of the book[187]when we were interrupted. I hope I shall find another opportunity of hearing his sentiments, which I am very eager to do. In a conversation which I yesterday had with Sharp he told me what he conceived Sir James' sentiments on reform to be[188]. If he is correct, I do not think that Sir James and I should be so much opposed to each other as he now thinks....
Very truly yours,David Ricardo.
[Addressed to Albury, Guildford.]
London,24th June, 1818.
My dear Sir,
Your letter arrived here whilst I was in Gloucestershire. I came to town last night, having on Monday presided at the County meeting, and made a return of our two members.
I thank you for your inquiries after the infant[189]that you left so ill.... It died ... on the day you left London. Dr. Holland was surprised at the rapidity with which the disease advanced....
I believe it is now finally settled that I am not to be in Parliament, and truly glad I am that the question is at anyrate settled, for the certainty of a seat could hardly compensate me for the disagreeables attending the negociation for it. Mr. Clutterbuck's[190]answer announced to me that the seat he had in view for me was disposed of; and thus end my dreams of ambition.
Having once consented to yield to the opinion of my friends, I let no opportunity slip of getting into the Honourable House; but I am fully persuaded that, if I consult my own happiness only, I shall do wisely in stopping where I am. It is easier to animadvert on the actions of others than to act with wisdom ourselves; and I strongly fear that I want both the judgment and discretion which are requisite to make a tolerable senator. I am surprised at the kindness and consideration with which my friends now treat me, and it would be a great want of prudence to afford them more easy means of sifting my claims.
I am equally pleased with you that Sir Samuel Romilly's election is going on so well in Westminster, and more pleased than you will be at Sir Francis Burdett's recent success on the poll[191]. Sir Francis is, I think, a consistent man. I believe Bentham's book has satisfied him that there would be no danger in universal suffrage; but his main object, I am sure, is to get a real representative government; and he would think that object might be [secur]ed by stopping very far short of universal suffrage. [With] such opinions it is a mere question of prin[ciple][192](as to the obtaining of his object) whether he shall ask for the more or the less extended suffrage. I agree with you that it would be more prudent to ask for the less, and I agree also with you in thinking that with our present experience we should not venture on universal suffrage if itcould be had. I am glad, however, to find, that you think the election in Westminster will afford us a fair sample of the sense of the nation.
I will take care that all demands against you shall be faithfully discharged.
I have not left myself room to enter at any length into the question of the comparative advantage of employing capital in agriculture or on manufactures[193]. If by wealth you mean as I do all those things which are desirable to man, wealth I think would be most effectually increased by allowing corn to be grown or imported as best suits those concerned in the trade. You say that in the one case the corn obtained would only be sufficient to support the workmen employedand pay fully the profits of stock; and in the other case it would pay in addition the increased amount of rent, and support an additional population proportioned to it. Now,if the profits of stock to be paid fullyin one case would be much greater both in value as defined by you, and in value as defined by me, than in the other, it is evident that the difference might not only equal the additional amount of rent but exceed it. I contend that the profits of stock would be higher than this whole amount if we consented to import corn, and therefore, although I will admit that in the case supposed our wealth has increased by the increase of rent from 1790 to 1818, yet I would contend that, if the trade had been free, and corn had been imported in preference to growing it, under the new and improved circumstances of agriculture, our wealth would have increased in a still greater ratio than it now has done....
Truly yours,David Ricardo.
Note.—In the new Parliament of 1818 Portarlington was represented, as in the last Parliament, by Richard Sharp, who seems to have retired in the course of six or seven months, for we find Ricardo's name in a division list as early as March 2, 1819. (Hansard,sub dato, p. 846.) It was a pocket borough, and there is nothing to show that Ricardo ever visited his constituents; but this did not prevent him from strongly denouncing the system of election. The biographer of J. B. Say asserts (apparently on pure conjecture) that Ricardo had bought an estate at Portarlington, and with it the seat in Parliament as one of its appurtenances (Say, Œuvres Diverses, p. 406): 'Possesseur de vastes domaines, il s'en trouvait qui, par un abus déploré par lui-même, lui donnaient entrée au parlement.' In his Biography of James Mill, p. 172, Professor Bain speaks as if Ricardo had entered Parliament at the General Election in 1818.
Note.—In the new Parliament of 1818 Portarlington was represented, as in the last Parliament, by Richard Sharp, who seems to have retired in the course of six or seven months, for we find Ricardo's name in a division list as early as March 2, 1819. (Hansard,sub dato, p. 846.) It was a pocket borough, and there is nothing to show that Ricardo ever visited his constituents; but this did not prevent him from strongly denouncing the system of election. The biographer of J. B. Say asserts (apparently on pure conjecture) that Ricardo had bought an estate at Portarlington, and with it the seat in Parliament as one of its appurtenances (Say, Œuvres Diverses, p. 406): 'Possesseur de vastes domaines, il s'en trouvait qui, par un abus déploré par lui-même, lui donnaient entrée au parlement.' In his Biography of James Mill, p. 172, Professor Bain speaks as if Ricardo had entered Parliament at the General Election in 1818.
[On outside of letter with the frankMinching Hampton(sic),Aug. 20, 1818.]
My dear Sir,
I am very much obliged to you for the kind manner in which you express yourself respecting the praise that has been so lavishly bestowed on me by the reviewer of my book, in the Edinburgh Review[195]. Immediately on reading it, I guessed that the writer of the article was Mr. M'Culloch[196], for from the publication of my book he appears sincerely to have embraced the views which I wished to impress on all my readers. I cannot but feel highly gratified at his praise, which I should not have been in anything like an equal degree if it had come from Mr. Mill, because, though I should not have doubted his sincerity, I should have imputed much to his friendship and goodopinion. The praise indeed is far beyond my merits, and would perhaps have really told more if the writer had mixed with it an objection here and there.
I do not remember what the question was which I answered consistently with my general principles in my last letter, and not having your letter here I cannot refer to it. I admit that by improvements in agriculture an enormous quantity of wealth may be created, and that in the natural progress of society much of that wealth may ultimately go to landlords in the shape of rent, but that does not alter the fact of rent being always a transfer, and never a creation of wealth—for before it is paid to the landlords as rent it must have constituted the profits of stock, and a portion is made over to the landlord only because lands of a poorer quality are taken into cultivation....
... You must have found your excursion to the Isle of Wight very pleasant....
You will have seen by the newspapers that I have been through all the parade and expense, which my office of sheriff imposes on me, when the judges attend the Assizes, without any advantage. The judge came into the town after midnight, by which his commission became void, and, after sending to London, Jury, Witnesses, Counsel, and Sheriff were all dismissed to their respective homes. It is expected that we shall have a new commission in two or three weeks....
I am sorry that you have not made any great progress in the work that you are about. After the reflection you have given to the subject I am not surprised that my reviewer has not shaken your confidence in your opinions. It would have been little flattering to me if he had, for I have had many opportunities, and have taken a great deal of pains to bring you round to my way of thinking without success. Why should he be so fortunate on the first trial? The truth I begin to suspect is that we do not differ so much as we have hitherto thought. I differed very littlefrom the opinions expressed in that part of your MS. which you read to me, but I wish to h[ave an] opportunity of judging of your system as a whole, and therefore shall be glad when it comes forth in its printed form.
I am glad to hear that Sir J. Mackintosh and Mr. Whishaw are well, pray remember me kindly to them. If either, or both of them, should go to Bowood[197]this season, I shall take it very kind of them if they will come for a few days to me. The Marquis of Lansdown has promised me a visit, and it would be particularly agreeable if they would all come at the same time. Should Mr. Whishaw be as near to me as Bowood he is already under an engagement to come. I met the Marquis and Marchioness of Lansdown at Gloucester; they entered the town on their way home from a tour, just as I was about leaving it; and owing to the breaking up of the courts were detained some time for want of horses. I suppose that you will be confined at Hertford till the Xmas vacation. I very much wish that Mrs. Malthus and you would pass a part of that vacation with us.... Mr. Mill arrived here yesterday evening to pay me his long promised visit. He brings me no news, excepting that he dined at Mr. Bentham's with Mr. Brougham, Mr. Rush[198]the American Ambassador, and Sir Samuel Romilly. The old gentleman is becoming gay. A party of four must to him be a formidably large one[199]....
Ever truly yours,D. Ricardo.
Note.—Between this letter and the next come probably the two quoted by McCulloch (Ricardo, Works, p.XXVI), to whom (if not to Mill) they were no doubt addressed: 7th April, 1819, 'You will have seen that I have taken my seat in the House of Commons. I fear that I shall be of little use there. I have twice attempted to speak; but I proceeded in the most embarrassed manner; and I have no hope of conquering the alarm with which I am assailed the moment I hear the sound of my own voice.' 22nd June, 1819, 'I thank you for your endeavours to inspire me with confidence on the occasion of my addressing the House. Their indulgent reception of me has, in some degree, made the task of speaking more easy to me; but there are yet so many formidable obstacles to my success, and some, I fear, of a nature nearly insurmountable, that I apprehend it will be wisdom and sound discretion in me to content myself with giving silent votes.' Happily he did not keep this resolution. It was at this time that George Grote was introduced to Ricardo, breakfasting with him at Brook Street (March 23 and 28, 1819), and walking with him and Mill in St. James's Park and Kensington Gardens afterwards. Grote used to submit his papers to Ricardo's judgment, and vied with Mill in admiration of him (Personal Life of George Grote, p. 36). A letter from Ricardo to Grote, dated March 1823, is given in Grote's Life (p. 42); Ricardo thanks Grote for having expressed approbation of his political conduct. One of Ricardo's last public appearances, outside Parliament, was at a Reform dinner, where he proposed the chief resolution of the evening in a speech which Grote helped him to prepare (Bain's Life of J. Mill, p. 208).
Note.—Between this letter and the next come probably the two quoted by McCulloch (Ricardo, Works, p.XXVI), to whom (if not to Mill) they were no doubt addressed: 7th April, 1819, 'You will have seen that I have taken my seat in the House of Commons. I fear that I shall be of little use there. I have twice attempted to speak; but I proceeded in the most embarrassed manner; and I have no hope of conquering the alarm with which I am assailed the moment I hear the sound of my own voice.' 22nd June, 1819, 'I thank you for your endeavours to inspire me with confidence on the occasion of my addressing the House. Their indulgent reception of me has, in some degree, made the task of speaking more easy to me; but there are yet so many formidable obstacles to my success, and some, I fear, of a nature nearly insurmountable, that I apprehend it will be wisdom and sound discretion in me to content myself with giving silent votes.' Happily he did not keep this resolution. It was at this time that George Grote was introduced to Ricardo, breakfasting with him at Brook Street (March 23 and 28, 1819), and walking with him and Mill in St. James's Park and Kensington Gardens afterwards. Grote used to submit his papers to Ricardo's judgment, and vied with Mill in admiration of him (Personal Life of George Grote, p. 36). A letter from Ricardo to Grote, dated March 1823, is given in Grote's Life (p. 42); Ricardo thanks Grote for having expressed approbation of his political conduct. One of Ricardo's last public appearances, outside Parliament, was at a Reform dinner, where he proposed the chief resolution of the evening in a speech which Grote helped him to prepare (Bain's Life of J. Mill, p. 208).
Gatcomb Park,21 Sept., 1819.
My dear Malthus,
I must not longer delay answering your kind letter. I have had you often in my mind, and was on the point of writing to you a short time ago, when I received a letter from Mill enclosing one from Mr. Napier, the editor or manager of the Encyclopedia Britannica, requesting him to apply to me to write an article on the Sinking Fund[201]for his publication. The task appeared too formidable to me to think of undertaking; and I immediately wrote toMill to that effect; but that only brought me another letter from him which hardly left me a choice, and at last I have consented to try what I can do, but with no hope of succeeding. I am very hard at work, because I wish to give Mr. Napier[202]the opportunity of applying to some other person, without delaying his publication, as soon as I have convinced Mill and him that I am not sufficiently conversant with matters of this kind. This business has lately engrossed all my time, and will probably continue to do so for at least a week to come.
So you moved from Henley to Maidenhead! You were determined not to lose sight of the Thames. I shall expect to see your name entered as a candidate for the annual wherry.
I am glad that you are proceeding merrily with your work. I now have hopes it will be finished. You have been very indolent, and are not half so industrious nor so anxious as I am when I have anything on hand.
I have not been able to give a proper degree of attention to the subject of your letter. The supposition you make of half an ounce of silver being picked up on the sea shore by a day's labour is, you will confess, an extravagant one. Under such circumstances silver could not, as you say, rise or fall, neither could labour, but corn could or rather might. Profits I think would still depend on the proportions of produce allotted to the capitalist and the labourer. The whole produce would be less, which would cause its price to rise, but of the quantity produced the labourer would get a larger proportion than before. This larger proportion would nevertheless be a less quantity than before, and would be of the same money value. In the case you suppose the rise of money wages does not appear to be necessary in the progress of cultivation to its extreme limits; but the reason is that you have excluded the use of capital entirely in the production of your medium of value. You know I agree with you that money is a more variable commodity than is generally imagined, and therefore I think that many of the variations in the price of commodities may be fairly attributed to an alteration in the value of money. It is difficult to conceive that in a great and civilized country any commodity of importance could be produced with equal advantage without the employment of capital. By what you tell me in your letter[203]you have respected my authority much too highly, and I do not consent that you should attribute to that respect the little activity you have displayed in getting your work finished. I wish that Mrs. Malthus and you would come to us here at Christmas. I shall then be quite in the humo[u]r to discuss all the difficult questions on which we appear to differ. My family is now in a settled state, and I think I can promise you more comfortable entertainment than I have yet been able to give you here. You must no longer plume yourself on being the principal object of Cobbett's[204]abuse. I have come in for my share of it, and just in the way that I anticipated. Even when he agrees with you he can find shades of difference which calls [sic] forth his virulence.
I had the pleasure of passing a few days lately in Mr. Whishaw's company at Mr. Smith's at Easton Grey. He was in very good spirits and very agreeable. We had some political discussion, particularly on Reform, and he was more liberal in his concessions than I have usually found him. I had Miss Hobhouse heartily on my side; and Mrs. Chandler, an enthusiast for the Whigs, declared that mine were the true Whig principles. Mr. Belshamwas of the party, but he did not take a decided part. Mr. Macdonnel, who came with Mr. Whishaw was, I thought, all but an ally. Are you not weary?...
Believe me, Ever yours truly,David Ricardo.
Note 1.—The Sinking Fund was a frequent topic of Ricardo's speeches in the House of Commons. It was a delusion to the people, who fancied it was paying off their National Debt, and a snare to the Government, who were constantly tempted to divert it from its proper purpose. So he declared in his first session (e.g. May 13, June 9, and June 18, 1819), and so he persisted, in his last. The following apologue on the subject from his speech of 28th Feb. 1823, is in the manner of Cobden, and shows how economists will rather read a difficult truth 'writ small' than 'writ large:'—'I have (he says) an income of £1000 a year, and I find it necessary to borrow £10,000, for which I agree to give up to my creditor £500 per annum. My steward says to me: "If you will live on £400 a year and give up another £100 out of your income of £500, that will enable you in a certain number of years to get completely rid of your debt." I listen to this good advice, live on £400 a year, and give up annually £600 to my steward in order to pay my creditor. The fist year my steward pays the creditor £100; then the debt would be £9,900, and therefore the income [or interest] due to the creditor would be only £495. But I continue to pay to my steward £600 per annum; and in the next year the steward pays over £105, and so from year to year the debt is diminished, £600 being still received by the steward. At the end of a certain number of years the result is this—that out of a yearly reserve of £600, half the debt is paid off; only £250 is due to the creditor, and £350 remains in the hands of the steward, his master continuing to live on £400 per annum. At this period some object occurring to the steward which he thinks might be of benefit to me or to himself, he borrows £7000, and devotes the whole £350 in his hands to pay the interest on that sum. What then becomes of my sinking fund? Originally I was in debt only £10,000; now I find myself indebted altogether £12,000; so that instead of possessing a sinking fund, as I had hoped, I am positively so much more in debt.' Ricardo's moral was that we should honestly give up pretendingto have a sinking fund. One of his own friends remarking that this was to believe, with the French lady, that the best way to overcome temptation was to yield to it, Ricardo retorts (speech of 6th March, 1823): 'If I knew I was going to be robbed of my purse, I should spend its contents myself first.'Note 2.—It is worth while to quote some parts of the passages of Cobbett, to which this letter refers. They were too violent to be taken seriously. If Dr. Johnson really loved a good hater, he lost much enjoyment by ending his days before Cobbett wrote. In the letter which appears in the Political Register for 4th Sept. 1819, Cobbett delivers himself as follows: 'I see that they [the borough-mongers] have adopted a scheme of one Ricardo (I wonder what countryman he is), who is I believe a converted Jew. At any rate he has been a 'Change Alley-man for the last fifteen or twenty years. If the Old Lord Chatham were now alive, he would speak with respect of the muckworm, as he called the 'Change Alley people. Faith, they are now becomeeverything. Baring assists at the Congress of Sovereigns, and Ricardo regulates things at home. The muckworm is no longer a creeping thing; it rears its head aloft, and makes the haughty borough-lords sneak about in holes and corners.'... He goes on to say that the doctrines preached in the 'Courier' and elsewhere about the inutility of ready money and the convenience of paper show that cash payments are not really thought practicable by these people. 'This Ricardo says that the country is happy in the discovery of a paper money, that it is an improvement in political science. Now if this were true it would be better to have a paper money inallcountries. And what standard ofvaluewould there then be? It is manifest that there could be none, and that commerce could not be carried on. Besides, what would be the peril in case of war?' Even as it is, the French expect us to be in their power in a very few years from this very cause, &c. In another letter to Hunt in the following number of the Register he goes on (p. 112): 'I wonder that Ricardo, hot from the 'Change, who talks of thelower ordersin such goodly terms, and was shocked at the idea of their increasing, ... had not thought of the fine and copiousdrainthat is continually going on from England to America. This was a little thing of sunshine amidst the gloom.' There are other references to Ricardo in the Register not much more complimentary.Ricardo and Malthus, however, wear their rue with a difference. Cobbett reaches his spring-tide level of vituperation in the letter written from Long Island on 6th Feb., and printed in the Political Register for May 8, 1819 (vol. 34, no. 33): 'To Parson Malthus, on the Rights of the Poor and on the cruelty recommended by him to be exercised towards the Poor.''Parson, I have during my life detested many men, but never any one so much as you. Your book ... could have sprung from no mind not capable of dictating acts of greater cruelty than any recorded in the history of the massacre of St. Bartholomew. Priests have in all ages been remarkable for cool and deliberate and unrelenting cruelty; but it seems to have been reserved for the Church of England to produce one who has a just claim to the atrocious preeminence. No assemblage of words can give an appropriate designation of you; and therefore, as being the single word which best suits the character of such a man, I call you Parson, which amongst other meanings includes that of Borough-monger Tool' (pp. 1019, 1020). He goes on to say he has drawn up a list of 743 obnoxious parsons, who have dared to exclude his Register and 'Paper against Gold' from their parish reading-rooms. 'I must hate these execrable Parsons; but the whole mass put together is not to me an object of such perfect execration as you, a man (if we give you the name) not to be expostulated with but to be punished' (1021).The best commentary on this scurrility may be found in a speech of Ricardo himself (July 1, 1823, on the 'Petition of Christian Ministers for free discussion'), where he says that ribald language should always be allowed full publicity, for it 'offends the common-sense of mankind' and can hope to make no serious converts.
Note 1.—The Sinking Fund was a frequent topic of Ricardo's speeches in the House of Commons. It was a delusion to the people, who fancied it was paying off their National Debt, and a snare to the Government, who were constantly tempted to divert it from its proper purpose. So he declared in his first session (e.g. May 13, June 9, and June 18, 1819), and so he persisted, in his last. The following apologue on the subject from his speech of 28th Feb. 1823, is in the manner of Cobden, and shows how economists will rather read a difficult truth 'writ small' than 'writ large:'—'I have (he says) an income of £1000 a year, and I find it necessary to borrow £10,000, for which I agree to give up to my creditor £500 per annum. My steward says to me: "If you will live on £400 a year and give up another £100 out of your income of £500, that will enable you in a certain number of years to get completely rid of your debt." I listen to this good advice, live on £400 a year, and give up annually £600 to my steward in order to pay my creditor. The fist year my steward pays the creditor £100; then the debt would be £9,900, and therefore the income [or interest] due to the creditor would be only £495. But I continue to pay to my steward £600 per annum; and in the next year the steward pays over £105, and so from year to year the debt is diminished, £600 being still received by the steward. At the end of a certain number of years the result is this—that out of a yearly reserve of £600, half the debt is paid off; only £250 is due to the creditor, and £350 remains in the hands of the steward, his master continuing to live on £400 per annum. At this period some object occurring to the steward which he thinks might be of benefit to me or to himself, he borrows £7000, and devotes the whole £350 in his hands to pay the interest on that sum. What then becomes of my sinking fund? Originally I was in debt only £10,000; now I find myself indebted altogether £12,000; so that instead of possessing a sinking fund, as I had hoped, I am positively so much more in debt.' Ricardo's moral was that we should honestly give up pretendingto have a sinking fund. One of his own friends remarking that this was to believe, with the French lady, that the best way to overcome temptation was to yield to it, Ricardo retorts (speech of 6th March, 1823): 'If I knew I was going to be robbed of my purse, I should spend its contents myself first.'
Note 2.—It is worth while to quote some parts of the passages of Cobbett, to which this letter refers. They were too violent to be taken seriously. If Dr. Johnson really loved a good hater, he lost much enjoyment by ending his days before Cobbett wrote. In the letter which appears in the Political Register for 4th Sept. 1819, Cobbett delivers himself as follows: 'I see that they [the borough-mongers] have adopted a scheme of one Ricardo (I wonder what countryman he is), who is I believe a converted Jew. At any rate he has been a 'Change Alley-man for the last fifteen or twenty years. If the Old Lord Chatham were now alive, he would speak with respect of the muckworm, as he called the 'Change Alley people. Faith, they are now becomeeverything. Baring assists at the Congress of Sovereigns, and Ricardo regulates things at home. The muckworm is no longer a creeping thing; it rears its head aloft, and makes the haughty borough-lords sneak about in holes and corners.'... He goes on to say that the doctrines preached in the 'Courier' and elsewhere about the inutility of ready money and the convenience of paper show that cash payments are not really thought practicable by these people. 'This Ricardo says that the country is happy in the discovery of a paper money, that it is an improvement in political science. Now if this were true it would be better to have a paper money inallcountries. And what standard ofvaluewould there then be? It is manifest that there could be none, and that commerce could not be carried on. Besides, what would be the peril in case of war?' Even as it is, the French expect us to be in their power in a very few years from this very cause, &c. In another letter to Hunt in the following number of the Register he goes on (p. 112): 'I wonder that Ricardo, hot from the 'Change, who talks of thelower ordersin such goodly terms, and was shocked at the idea of their increasing, ... had not thought of the fine and copiousdrainthat is continually going on from England to America. This was a little thing of sunshine amidst the gloom.' There are other references to Ricardo in the Register not much more complimentary.
Ricardo and Malthus, however, wear their rue with a difference. Cobbett reaches his spring-tide level of vituperation in the letter written from Long Island on 6th Feb., and printed in the Political Register for May 8, 1819 (vol. 34, no. 33): 'To Parson Malthus, on the Rights of the Poor and on the cruelty recommended by him to be exercised towards the Poor.'
'Parson, I have during my life detested many men, but never any one so much as you. Your book ... could have sprung from no mind not capable of dictating acts of greater cruelty than any recorded in the history of the massacre of St. Bartholomew. Priests have in all ages been remarkable for cool and deliberate and unrelenting cruelty; but it seems to have been reserved for the Church of England to produce one who has a just claim to the atrocious preeminence. No assemblage of words can give an appropriate designation of you; and therefore, as being the single word which best suits the character of such a man, I call you Parson, which amongst other meanings includes that of Borough-monger Tool' (pp. 1019, 1020). He goes on to say he has drawn up a list of 743 obnoxious parsons, who have dared to exclude his Register and 'Paper against Gold' from their parish reading-rooms. 'I must hate these execrable Parsons; but the whole mass put together is not to me an object of such perfect execration as you, a man (if we give you the name) not to be expostulated with but to be punished' (1021).
The best commentary on this scurrility may be found in a speech of Ricardo himself (July 1, 1823, on the 'Petition of Christian Ministers for free discussion'), where he says that ribald language should always be allowed full publicity, for it 'offends the common-sense of mankind' and can hope to make no serious converts.
Gatcomb Park,9 Nov., 1819.
My dear Malthus,
... I shall go to London alone, on the 22nd, and of course I shall continue there until Parliament adjourns for the holidays:—perhaps you may have occasion to visit town during that time, if so, I shall have a bed at your service, and such fare as can be furnished by my factotum in Brook Street.
I am glad that Mr. Whishaw has expressed satisfaction with his very short visit here. I was very much pleased with his company—no one could be more agreeable, nor more disposed to be satisfied with everything about him. We had many conversations on the subject of Parliamentary Reform, and I was glad to find that our sentiments accorded much more than I had previously imagined. I should be quite contented with such a reform as Mr. Whishaw was willing to grant us. I am certainly not more inclined than I was before to Radicalism[205], after witnessing the proceedings of Hunt, Watson, and Co., if by Radicalism is meant Universal Suffrage. I fear, however, that I should not think the moderate reform, which you are willing to accede to, a sufficient security for good government. Your scheme of reform, if I recollect right, is as much too moderate as the universal suffrage plan is too violent: something between these would give me satisfaction. Do you think that any great number of the people can really be deluded with the idea that any change in the representation would completely relieve them from their distresses? There may be a few wicked persons who would be glad of a revolution, with no other view but to appropriate to themselves the property of others, but this object must be confined to a very limited number, and I cannot think so meanly of the understandings of those who are well disposed, as to suppose that they sincerely believe a reform in Parliament would give them work, or relieve the country from the payment of the load of taxes with which we are now burthened; neither do I observe in the speeches which are addressed to the mob any such extravagant expectations held out to them. If there were I am sure they know better than to believe the speakers who make such delusive promises. I expect that we shall have a very stormy session of Parliament.
With respect to my calculations, I have only this to say in defence of them, that I never brought them forward for any practical use, but merely to elucidate a principle. It is no answer to my theory to say that 'it is scarcely possible that all my calculations should not be necessarily and fundamentally erroneous,' for that I do not deny; but still it is true that the proportion of produce in agriculture or manufactures, retained by the capitalist who sets the labourers to work, will depend on the quantity of labour necessary to provide for the maintenance and support of the labourers.
You ask me 'whether, when land is thrown out of cultivation from the importation of foreign corn, I consider the new rate of profits as determined by the state of the land, or the stationary prices of manufactured and mercantile products compared with the fall of wages.' You have correctly anticipated my answer. 'Capital will,' I think, 'be withdrawn from the land till the last capital yields the profit obtained (by the fall of wages) in manufactures, on the supposition of the price of such manufactures remaining stationary.[']
I am glad to hear that your book will be so soon in the press, but I regret that the most important part of the conclusions from the principles which you endeavour to elucidate, will not be included in it, I mean taxation. In a letter which I have lately received from Turner[206], he is full of regret that the important subject of taxation receives so little attention from Political Economists;—at this time he thinks it peculiarly important, and I cannot but agree with him. As soon as you have launched your present work, Ihope you will immediately prepare to give us your thoughts on a subject in which [we] are all practically interested.
I have received a letter also very lately from M'Culloch, he has been writing an article on Exchanges for the Ency. Brit., which is very well done, I think; although I cannot agree with one or two of his definitions.
I finished in my hasty way the article I had undertaken to do on the Sinking Fund, and then became so disgusted with it, that I was glad to get rid of it. I have given so many injunctions not to regard my supposed feelings in deciding whether it shall or shall not be published, that I much doubt whether it will ever see the light....
Ever yours,D. Ricardo.
Note.—The gap between the above letter (of 9th Nov. 1819) and the following (of 4th May, 1820) may be filled up by a letter of Ricardo to J. B. Say, dated from London, 11th January, 1820 (Œuvres Diverses, p. 414). After thanking him for a present (which appears from Say's reply to have been a French translation of his 'Pol. Econ. and Taxation') and a letter, he goes on to say: 'I remember hearing you tell me when I saw you in Paris that in each successive edition of our respective works our opinions would approximate to each other more and more, and I am convinced that the truth of the remark will be demonstrated.' Our differences (he goes on) are becoming rather verbal than substantial. Your chapter on Value has in my opinion gained considerably. You misrepresent me, however, on that subject when you say I consider thevalueof labour to determine the value of commodities; I hold, on the contrary, that it is not the value, but 'thecomparative quantity of labournecessary to production which regulates the relative value of the commodities produced.' Also in regard to Rent, Profits, and Taxation, you do not observe that my reasoning proceeds on the assumption that there is in every country 'a land which yields no rent,orthere is a capital employed on the land with a view to profit merely, and paying no rent for it.' [See 'Pol. Ec. and Tax.' (McC.'s ed.), ch. xii. p. 107.] The latter you pass over withoutanswer. I forward you the 2nd edition of my book, which 'has nothing new in it, as I have not had the courage to recast it.' He concludes by saying: 'Political Economy is gaining ground. Sounder principles are now brought forward. Your treatise is rightly in the first rank of authorities. The debates in parliament last session were satisfactory to the friends of the science. The true principles of currency are at last recognised. I think that on that point we shall not again go astray. Jeremy Bentham and Mill are well; I saw them a short time ago.'Say answers (2nd March, 1820) that their controversy would certainly end in agreement, if it were not cut short by death, as a recent fit of apoplexy had made him think probable. He then briefly defends himself against Ricardo's criticisms. How can you (he says) determine the quantity and quality of the labour except by the price paid to obtain it? As to the two parts of your proposition on Rent, I see no reason for disagreeing with the second when I differ from the first, and I think (with you) that taxation in the second case will be shifted to the consumers.
Note.—The gap between the above letter (of 9th Nov. 1819) and the following (of 4th May, 1820) may be filled up by a letter of Ricardo to J. B. Say, dated from London, 11th January, 1820 (Œuvres Diverses, p. 414). After thanking him for a present (which appears from Say's reply to have been a French translation of his 'Pol. Econ. and Taxation') and a letter, he goes on to say: 'I remember hearing you tell me when I saw you in Paris that in each successive edition of our respective works our opinions would approximate to each other more and more, and I am convinced that the truth of the remark will be demonstrated.' Our differences (he goes on) are becoming rather verbal than substantial. Your chapter on Value has in my opinion gained considerably. You misrepresent me, however, on that subject when you say I consider thevalueof labour to determine the value of commodities; I hold, on the contrary, that it is not the value, but 'thecomparative quantity of labournecessary to production which regulates the relative value of the commodities produced.' Also in regard to Rent, Profits, and Taxation, you do not observe that my reasoning proceeds on the assumption that there is in every country 'a land which yields no rent,orthere is a capital employed on the land with a view to profit merely, and paying no rent for it.' [See 'Pol. Ec. and Tax.' (McC.'s ed.), ch. xii. p. 107.] The latter you pass over withoutanswer. I forward you the 2nd edition of my book, which 'has nothing new in it, as I have not had the courage to recast it.' He concludes by saying: 'Political Economy is gaining ground. Sounder principles are now brought forward. Your treatise is rightly in the first rank of authorities. The debates in parliament last session were satisfactory to the friends of the science. The true principles of currency are at last recognised. I think that on that point we shall not again go astray. Jeremy Bentham and Mill are well; I saw them a short time ago.'
Say answers (2nd March, 1820) that their controversy would certainly end in agreement, if it were not cut short by death, as a recent fit of apoplexy had made him think probable. He then briefly defends himself against Ricardo's criticisms. How can you (he says) determine the quantity and quality of the labour except by the price paid to obtain it? As to the two parts of your proposition on Rent, I see no reason for disagreeing with the second when I differ from the first, and I think (with you) that taxation in the second case will be shifted to the consumers.
London,4 May, 1820.
My dear Malthus,
... I have read your book[208]with great attention. I need not say that there are many parts of it in which I quite agree with you. I am particularly pleased with your observations on the state of the poor; it cannot be too often stated to them that the most effectual remedy for the inadequacy of their wages is in their own hands. I wish you could succeed in ridding us of all the obstacles to the better system, which might be established.
After the frequent debates between us you will not be surprised at my saying that I am not convinced by your arguments on those subjects on which we have long differed. Our differences may in some respects, I think, beascribed to your considering my book as more practical than I intended it to be. My object was to elucidate principles, and to do this I imagined strong cases that I might show the operation of those principles[209]. I never thought, for example, that practically any improvements took place on the land which would at once double its produce; but, to show what the effect of improvements would be, undisturbed by any other operating cause, I supposed an improvement to that extent to be adopted; and I think I have reasoned correctly from such premises. I am sure I do not undervalue the importance of improvements in agriculture to landlords, though it is possible that I may not have stated it so strongly as I ought to have done. You appear to me to overvalue them; the landlords would get no more rent while the same capital was employed as before on the land, and no new land was taken into cultivation; but, as with a lower price of corn new land could be cultivated and additional capital employed on the old land, the advantage to landlords would be manifest. Because the landlord's corn rent would increase without these conditions, you appear to think he would be benefited; but his additional quantity of corn would exchange for no more money nor for any additional quantity of other goods. If labour were cheaper, he would be benefited in as far as he would save on the employment of his gardeners and perhaps some other menial servants, but this advantage would be common to all who had the same money revenue, from whatever source it might be derived. The compliment you pay me in one of your notes[210]is most flattering. I am pleased at knowing that you entertain a favourable opinion of me; but I fear that the world willthink, as I think, that your kind partiality has blinded you in this instance.
I differ as much as I ever have done with you in your chapter on the effects of the accumulation of capital[211]. Till a country has arrived to [sic] the end of its resources from the diminished powers of the land to afford a further increase, [I hold] it to be impossible that there should [be at the] same time a redundancy of capital and of [commodities (?)]. [I] agree that profits may be for a time very l[ow] because capital is abundant compared with [labour][212], they cannot both, I think, be abundant at one [and the same time].
Admitting that you are correct on this [point, I doubt] whether the inference you draw is the correct one, and it [does not seem to me] wise to encourage unproductive consumption. If individuals would not do their duty in this respect, government might be justified in raising taxes for the mere purpose of expenditure.
McCulloch[213]has a short review of your book in the last Scotsman; it is chiefly on the subject of value; he differs from you but does so with the greatest civility and good humour. Torrens has an interest in (I believe he is editor of) the Traveller[214], and as his arguments are on my side, I of course think his criticism just....
Believe me, ever truly yours,David Ricardo.
Gatcomb Park,Sept. 4, 1820.
My dear Malthus,
I was very desirous of hearing from you, and was on the point of telling you so when your letter reached me from Brighton. Mr. Hump[hre]y Austin, a neighbour of mine, told me he saw you at Paris and I had heard of your safe arrival in England. I am quite pleased to hear that your journey has been agreeable to you; it could not fail to be so when it gave you the opportunity of seeing and conversing with the principal literary men of France and of hearing their opinions on the present state of that important country. I hope in that quarter there will be no interruption of the present order of things for some time to come; but, if they do make a movement, I trust it will be for the purpose of securing more effectually the liberty of the people by perfecting as far as human means can perfect the representative system. There is nothing on which the happiness of the great body of the people so much depends. I did not expect that I had so many readers in France as the number of copies of the French translation which you tell me have been sold would seem to imply. I am not surprised that you found few who understood my theory correctly and still fewer who were disposed to agree with me. I have not yet succeeded in making many converts in my own country; but I do not despair of seeing the number increase; the few I have are of the proper description, and do not want zeal for the propagation of the true faith.
I have seen Say's letters to you[216]; it appears to me thathe has said a great deal for the right cause but not all that could be said. In one point I think he falls into the same error as Torrens in his article in the Edinburgh Review[217]. They both appear to think that stagnation in commerce arises from a counter set of commodities not being produced without which the commodities on sale are to be purchased, and they seem to infer that the evil will not be removed till such other commodities are in the market. But surely the true remedy is in regulating future production; if there is a glut of one commodity, produce less of that and more of another, but do not let the glut continue till the purchaser chooses[218]to produce the commodity which is more wanted. I am not convinced by anything Say says of me; he does not understand me and is frequently at variance with himself, when value is the subject he treats of. In his 4th edition[219], vol. ii, page 36, he says everything falls in value, as the quantity is increased, by the facility of production. Now suppose that you have to pay for what he calls 'services productifs' in these commodities which have so fallen in value, will you give the same value if you give for them the same quantity of commodities as before? Certainly not, according to his own admission; and yet he maintains, page 33, that productive services have not varied if they receive the same quantity of a commodity, notwithstanding the cost of production of that commodity may have fallen from 40 to 30 francs per ell. He has two opposite notions about value, and I am sure to be wrong if I differ with either of them[220].
I am sorry that the government of France is prejudicedagainst Political Economy. Whatever differences of opinion may exist amongst writers on that science, they are nevertheless agreed upon many important principles, which are proved to demonstration. By an adherence to these, governments cannot fail to promote the welfare of the people who are submitted to their sway. What more clear than the advantages which follow from freedom of trade, or than the evils resulting from holding out any peculiar encouragement to population?
I have been reading your book a second time with great attention, but my difference with you remains as firmly rooted as ever. Some of the objections you make to me are merely verbal; no principle is involved in them; the great and leading point in which I think you fundamentally wrong is that which Say has attacked in his letters. On this I feel no sort of doubt. With respect to the word value, you have defined it one way, I another. We do not appear to mean the same thing, and we should first agree what a standard ought to be and then examine which approaches nearest to an invariable standard, the one you propose, or that which I propose.
I have not heard of anything further having been written against you either by McCulloch or Torrens, nor do I know that they have anything in contemplation. McCulloch has written me two letters since I saw you last; he does not say anything about value, and it will probably be a year or two before he can publish anything on that subject in the Supplement to the Encyclopedia. In the next Review there will be an article of his on Tithes, which I have seen; his principles are right, but I do not like his remedy for the existing evil[221].
Mill has been with me here for a fortnight and will staysome time longer. He has it in contemplation to write a popular work on Political Economy[222], in which he will explain the principles which he thinks correct in the most familiar way for the use of learners. It is not his intention to notice any person's opinions or to enter into a controversy on the disputed points.
I have been looking over my first chapter with a view to make a few alterations in it before the work goes to another edition. I find my task very difficult, but I hope I shall make my opinions more clear and intelligible. I did intend to defend myself against some of your attacks, but on reflection I think that, to do myself justice, I must say so much that I should very inconveniently enlarge the size of my book, besides which I should be constantly drawing my readers' attention from the [proper?] subject. If I defend myself at all, I must do it in [a] separate publication[223].
Respecting the trial of the Queen I am more than ever convinced of the impolicy and inexpediency of the proceedings which have led to it, and am quite sure that the plea set up that it is a State question is a false one: it is entered into merely to gratify the resentment and hostility of one individual who has himself behaved so ill that whatever he may have to complain of he so fully merits that no one is bound to enter into his quarrels or wish for punishment to follow offences to which his own conduct has been so instrumental.... Gatcomb is very delightful. I wish you and Mrs. Malthus could give us your company here before we go to London. Mr. Mill desires to be kindly remembered.
Ever yours,David Ricardo.
Gatcomb Park,10 Oct., 1820.
My dear Malthus,
The Queen's defence appears to be going on well; a few more such evidence [sic] as Sir Wm. Gell and I think the Lords cannot pass the bill; in that case I shall not be called to town, and if you are in this part of the world at Christmas perhaps we shall see you at Gatcomb.
Warburton is staying at Easton Grey and has paid us a visit of two or three days with the Smiths; he was very agreeable. He does not speak quite positively, but I think he is one of my disciples and agrees with me on some of those points which you most strongly dispute.
I quite agree with you in thinking that M. Say's letters to you are not very well done. He does not even defend his own doctrine with peculiar ability, and on some other of the intricate questions, on which he touches, he appears to me to be very unsatisfactory. He certainly has not a correct notion of what is meant by value when he contends that a commodity is valuable in proportion to its utility. This would be true if buyers only regulated the value of commodities; then indeed we might expect that all men would be willing to give a price for things in proportion to the estimation in which they held them; but the fact appears to me to be that the buyers have the least in the world to do in regulating price; it is all done by the competition of the sellers, and, however the buyers might be really willing to give more for iron than for gold, they could not, because the supply would be regulated by the cost of production, and therefore gold would inevitably be in the proportion which it now is to iron, although itprobably is by all mankind considered as the less useful metal.
I think more may be said in defence of his doctrine of services; they are, I think, the regulators of value, and, if he would give up rent, he and I should not differ very materially on that subject. In what he says of services he is quite inconsistent with his other doctrine about utility. He appears to me to talk very ignorantly of the taxation of England. In the note, page 101, he concedes too much. The difficulty of finding employment for capital in the countries you mention proceeds from the prejudices and obstinacy with which men persevere in their old employments; they expect daily a change for the better, and therefore continue to produce commodities for which there is no adequate demand. With abundance of capital and a low price of labour there cannot fail to be some employments which would yield good profits; and, if a superior genius had the arrangement of the capital of the country under his control[225], he might, in a very little time, make trade as active as ever. Men err in their production; there is no deficiency of demand. If I wanted cloth and you cotton goods, it would be great folly in us both, with a view to an exchange between us, for one of us to produce velvets and the other wine; we are guilty of some such folly now, and I can scarcely account for the length of time that this delusion continues. After all, the mischief may not be so great as it appears. You have fairly represented the point at issue between us;—I cannot conceive it possible, without the grossest miscalculation, that there should be a redundancy of capital and of labour at the same time.
When I say mine is the true faith, I mean to express only my strong conviction that I am right; I hope you do not attach anything like arrogance to the expression.I am in the habit of asserting my opinion strongly to you, and I am sure you would not wish me to do otherwise. I am satisfied that you should do the same by yours, and I dare say you will agree with me that you are not more inclined to yield to mere authority without being convinced than I am[226]. I affirm with you that 'if the farmer has no adequate market for his produce, he will soon cease to distribute more necessaries to his labourers,' with a view to the production of more necessaries; but will he therefore leave that part of his capital inactive, will not he or somebody else employ it in producing something which will meet an adequate market? You speak of the relativeutilityof our two definitions of value. I confess that your definition[227]does not convey to my mind anything approximating to the idea I have ever formed of value. To say that real value as applied to wages implies the quantity of necessaries given to the labourer, at the same time that you agree that those necessaries are as variable as anything else, appears to me a contradiction. Political Economy you think is an enquiry into the nature and causes of wealth; I think it should rather be called an enquiry into the laws which determine the division of the produce of industry amongst the classes who concur in its formation. No law can be laid down respecting quantity, but a tolerably correct one can be laid down respecting proportions. Every day I am more satisfied that the former enquiry is vain and delusive, and the latter only the true object of the science. You say that my proposition, 'that with few exceptions the quantity oflabour employed on commodities determines the rate at which they will exchange for each other, is not well founded.' I acknowledge that it is not rigidly true, but I say that it is the nearest approximation to truth, as a rule for measuring relative value, of any I have ever heard. You say demand and supply regulates value [sic]; this I think is saying nothing, and for the reason I have given in the beginning of this letter: it is supply which regulates value[228], and supply is itself controlled by comparative cost of production. Cost of production, in money, means the value of labour as well as profits. Now, if my commodity be of equal value with yours, its cost of production must be the same. But cost of production is, with some deviations, in proportion to labour employed. My commodity and your commodity are both worth £1000; they will therefore probably have the same quantity of labour realized in each. But the doctrine is less liable to objections when employed not to measure the whole absolute value of the commodities compared, but the variations which from time to time take place in relative value. To what causes, I mean permanent causes, can these variations be attributed? To two and to two only, one insignificant in its effects, a rise or fall of wages, or what I think the same thing a fall or rise of profits, the other of immense importance, the greater or less quantity of labour that may be required to produce the commodities. From the first cause no great effects may follow because profits themselves constitute but a small portion of price, and no great addition or deduction can be made on their account. To the other cause no very confined limit can be assigned, for the quantity of labour required to produce commodities may vary to double or treble.
The subject is difficult, and I am but a poor master oflanguage, and therefore I shall fail to express what I mean. My first chapter[229]will not be materially altered; in principle I think it will not be altered at all....
Ever truly yours,David Ricardo.