Note.—The MS. referred to in this letter was probably the pamphlet on 'Economical and Secure Currency,' which internal evidence would show to have been printed not earlier than Feb., 1816. Ricardo, as appears from Letter XL, had already submitted the MS. to James Mill. In the fragment of a letter to Mill (quoted in Bain's 'Life of Mill,' p. 153, and dated Jan., 1816) he writes: 'Fill eight pages in the Appendix, will that be too much?' Professor Bain thinks this must refer to the 'Principles of Political Economy and Taxation' (1817). But that work has no Appendix; and there seems no reason why it should not refer to the 'Economical and Secure Currency' (1816), which has one. The 'Resolutions proposed concerning the Bank of England by Mr. Grenfell,' and those proposed by Mr. Mellish, together, cover seven pages of that Appendix in the original edition; and Ricardo in the fragment quoted had probably been saying, that these Resolutions, if he printed them, would fill nearly eight pages, etc.
Note.—The MS. referred to in this letter was probably the pamphlet on 'Economical and Secure Currency,' which internal evidence would show to have been printed not earlier than Feb., 1816. Ricardo, as appears from Letter XL, had already submitted the MS. to James Mill. In the fragment of a letter to Mill (quoted in Bain's 'Life of Mill,' p. 153, and dated Jan., 1816) he writes: 'Fill eight pages in the Appendix, will that be too much?' Professor Bain thinks this must refer to the 'Principles of Political Economy and Taxation' (1817). But that work has no Appendix; and there seems no reason why it should not refer to the 'Economical and Secure Currency' (1816), which has one. The 'Resolutions proposed concerning the Bank of England by Mr. Grenfell,' and those proposed by Mr. Mellish, together, cover seven pages of that Appendix in the original edition; and Ricardo in the fragment quoted had probably been saying, that these Resolutions, if he printed them, would fill nearly eight pages, etc.
London,7 Feb., 1816.
My dear Sir,
I arrived in town yesterday, with the whole of my numerous family. We are already as comfortably settled in Brook Street as under all circumstances we can expect, andI hasten to inform you that we have a bed ready for you, which I hope you will very soon occupy. I have forgotten on which Saturday in the month you meet at the King of Clubs, but conclude from your last meeting that it is the second. If so, you will probably be in town to-morrow or Friday, when I shall hope that you will lodge at our house and give us as much of your company as your numerous friends will allow you to do.
You have probably ere this seen my book[125]. I have been reading it in its present dress, and very much lament that I make no progress in the very difficult art of composition. I believe that ought to be my study before I intrude any more of my crude notions on the public.
It is said that the Bank have made some agreement with Government, but what it is is not exactly known. They talk of the Bank advancing to Government six millions at four per cent., besides continuing the loan of three millions without interest. We shall not, however, be long in suspense on this subject, as a general court of proprietors is to be held to-morrow, when the directors will make some communication to the proprietors to ask for their vote to sanction their agreement. They will ask for this without giving them any information either respecting their savings, their profits, or the amount of public deposits. Is not this a ridiculous piece of mockery, and an insult to our common sense? I hope there may be a few independent proprietors present who may call for information, or who may at least demand a ballot, for which purpose nine only are necessary[126]. You would be surprised at the abjectness of the city men, and the great influence which the directors have in consequence of their power of discounting bills. I am persuaded many of the proprietors would vote very differently at a ballot, to what they would by a show of hands.
I have not thought much on our old subject; my difficulty is in so presenting it to the minds of others as to make them fall into the same chain of thinking as myself. If I could overcome the obstacles in the way of giving a clear insight into the original law of relative or exchangeable value, I should have gained half the battle....
Very truly yours,David Ricardo.
[On the back of this are jotted figures and lists of books in Malthus' handwriting.]
London,23rd Feb., 1816.
My dear Sir,
I beg to remind you that the first Saturday in the next month is to-morrow se'n-night, on which day or a few days before it, I hope to have the pleasure of seeing you in Brook Street. We have a bed always at your service, and I wish you would make the rule invariable to take up your lodging with us whenever you visit London.
I hope you have quite determined to extend your new edition to another volume, and that you are now making great progress in it. I wish much to see a regular and connected statement of your opinions on what I deem the most difficult and perhaps the most important topic of political economy, namely, the progress of a country in wealth, and the laws by which the increasing produce is distributed.
Have you seen Torrens' Letter to Lord Liverpool[127]? He appears to me to have adopted all my views respecting profits and rent; and, in some conversation which I had with him a few days ago, he unequivocally avowed that he was now of my opinion, that the price of labour, arising from a difficulty in procuring food, did not affect the pricesof commodities. He confessed that his former view on that subject was erroneous. I should be glad to see all the arguments in favour of my view of the question clearly and ably stated. I should not wonder if Torrens undertook it.
The sale of my last pamphlet has far exceeded its merits. Murray is printing a second edition[128]. I had no idea that the subject was of much interest to the public, but it seems that they are curious about the amount of the Bank treasure. In the House of Commons the defence of the contracts with the Bank was very little satisfactory; they endeavoured to fix the attention of the House on what the public had got and saved by the operations of the Bank; they seemed to think that all the rest belonged of right to the Bank.
Will Ministers be able to carry the Income Tax[129]?
Very truly yours,David Ricardo.
Note.—Torrens came nearest to fulfilment of the above forecast in his 'Essay on the Production of Wealth' (1821), which was announced as 'a general treatise upon Political Economy, combining with the principles of Adam Smith so much of the more recent doctrines as may be conformable to truth and embodying the whole into one consentaneous system.' (Pref. p. v.) But he thinks out the subject vigorously for himself; and, though in all his later books he extols Ricardo above all his contemporaries, he finds frequent occasion to differ from him. Indeed he occasionally claims that Ricardo is the borrower, and he the lender. Ricardo, for example, is indebted to him (he says) for the doctrine that, when a nation has great advantage in one production but a much greater advantage in another, it will confine itself to producing the latter, and will even import the former (Ricardo, Works, pp. 76, 77; cf. Torrens, Preface to Essay on External Corn Trade, p. vii). Yet the doctrine has always passed as Ricardianparexcellence(see e.g. Cairnes, Leading Principles of Political Economy, Part III. ch. i. p. 371, and Logical Method, p. 81), and we should not guess, from Letter XLVII for example, that Ricardo was the convert. The Preface to the 'Production of Wealth' ends with the prediction that in twenty years' time there would be unanimity amongst Economists on all fundamental principles.
Note.—Torrens came nearest to fulfilment of the above forecast in his 'Essay on the Production of Wealth' (1821), which was announced as 'a general treatise upon Political Economy, combining with the principles of Adam Smith so much of the more recent doctrines as may be conformable to truth and embodying the whole into one consentaneous system.' (Pref. p. v.) But he thinks out the subject vigorously for himself; and, though in all his later books he extols Ricardo above all his contemporaries, he finds frequent occasion to differ from him. Indeed he occasionally claims that Ricardo is the borrower, and he the lender. Ricardo, for example, is indebted to him (he says) for the doctrine that, when a nation has great advantage in one production but a much greater advantage in another, it will confine itself to producing the latter, and will even import the former (Ricardo, Works, pp. 76, 77; cf. Torrens, Preface to Essay on External Corn Trade, p. vii). Yet the doctrine has always passed as Ricardianparexcellence(see e.g. Cairnes, Leading Principles of Political Economy, Part III. ch. i. p. 371, and Logical Method, p. 81), and we should not guess, from Letter XLVII for example, that Ricardo was the convert. The Preface to the 'Production of Wealth' ends with the prediction that in twenty years' time there would be unanimity amongst Economists on all fundamental principles.
London,5 March, 1816.
My dear Sir,
The public papers have ere this informed you of the result of yesterday's ballot at the India House; Mr. Jackson's motion was lost by a majority of twenty-one or twenty-two. Mr. Jackson, in his reply, said everything of you that your most partial friends could wish; and indeed the general tone of his speech, yesterday, was much more moderate than that by which he introduced his motion. Mr. Bosanquet's[130]comments on some passages in your pamphlet[131]lead me to think that he must have misunderstood you, as I conceive that it was not your intention by recommending the directors to appoint more young men than there were vacant writerships, that the unsuccessful candidates should be finally and irrecoverably dismissed from all chance of going out to India[132]. I imagine that it was your intention to let them be again competitors for one of the prizes of the following year, and therefore that the punishment of their neglect would rather be a delay in their appointment than an absolute dismission. Mr. Bosanquet appeared to me to argue on the latter supposition.
Mr. Elphinstone[133]spoke very kindly and very handsomely of the professors; yet I thought that he was by farthe most formidable opponent of the College as at present constituted, and the one that I should have been least able to answer. His speech was short, but from the moderation of his language it produced, I think, a considerable effect, and gave great courage to Mr. Jackson's party. I hope this subject will not be again revived, or, rather, I hope that the proficiency of the young men, and the absence of all turbulence, will satisfy every one of the impolicy of interfering with the establishment.
I am sorry to be under the necessity of putting off my visit to you, but I shall not be able to be with you on Saturday[134].... We are going ... into Gloucestershire, so that I must defer my visit to you to some more favourable opportunity. Perhaps you may be in London to the King of Clubs. If so, pray come to us. I wanted to show you my observations[135]on your pamphlets before they go to the printers. If I do not see you on Friday, I shall send them by the coach in a few days. As they are the last article in my very poor performance, the printer will probably not want them till my return[136]. When you have read them, pray send them with your observations to Brook Street by the coach....
Very truly yours,David Ricardo.
London,24th April, 1816.
My dear Sir,
It is not too soon to remind you that Mrs. Ricardo and I expect to have the pleasure of Mrs. Malthus' and your company at our house on your visit to London in the next week. I hope it will be early in the week, and thatyou will not be in so great a hurry to get home as you usually are. On the Monday, after your club meeting, I shall ask a few of your and my friends to meet you at dinner, and on Sunday or any other day perhaps Warburton and Mill will take a family meal with us. I have just received an invitation from Mr. Blake to dine with him on Friday the 3rd May, and I have taken upon myself to let you know from him that he hopes you will favour him with your company on that day. You will I trust be also agreeable to this arrangement.
I hope you have made better use of your time than I have done of mine, and that you are making rapid advances with the different works which you have in hand. I have done nothing since I saw you as I have been obliged to go very often into the city, and after leaving off for a day or two I have the greatest disinclination to commence work again. I may continue to amuse myself with my speculations, but I do not think I shall ever proceed further. Obstacles almost invincible oppose themselves to my progress, and I find the greatest difficulty to avoid confusion in the most simple of my statements.
Have you seen Torrens' letters to the Earl of Lauderdale in the 'Sun?' I think he has published five. They are chiefly on the subject of currency, and are ingenious, though I think they support some very incorrect doctrines. They are signed with his name.
Horner, I understand, will oppose the continuance of the restriction bill; he does not deny now the fall in the value of gold and silver since the termination of the war. There cannot be a better opportunity than the present for the Bank to recommence payments in specie. Silver is actually under the mint price. The change is surprising [and has been] brought about in a very unexpected [manner]....
Very truly yours,David Ricardo.
London,28 May, 1816.
My dear Sir,
From what you said when you left London it is probable that you will not be at the Club on Saturday next. If your visit to town should be deferred till the following Tuesday we have a bed at your service—it is now occupied by Mr. and Mrs. Smith, our Gloucestershire friends. In case you should come sooner I hope you will be able to pass much of your time with us. Our breakfast hour is now at so reasonable a time that I hope you will take that meal with us the first morning you are in London, and then settle how often we shall see you at dinner.
I suppose you have been too busy in official occupations, since we last met, to have made much progress in the writings which you have in hand. I hope, however, that you will be prepared to give the public the result of your well considered opinions in due season. We have a right to look to you for the correction of some difficulties and contradictions with which Political Economy is encumbered[137].
Major Torrens tells me that he shall work hard for the next few months, so that we may expect a book on the same subject from him next year. He continues to hold some heretical opinions on money and exchange, notwithstanding Mr. Mill and I have exerted all our eloquence to bring him to the right faith. We, however, have succeeded in removing some of the obscurity which clouds his vision on the principles of exchange. He is, I think, quite a convert toallwhat you have called my peculiar opinions on profits, rent, etc. etc., so that I may fairly say that I hold no principles on Political Economy which have not the sanction either of your or his authority, which renders it much lessimportant that I should persevere in the task which I commenced of giving my opinions to the public. Those principles will be much more ably supported either by you or by him than I could attempt to support them. My labours have wholly ceased for two months; whether in the quiet and calm of the country I shall again resume them is very doubtful. My vanity has not received sufficient stimulus to remove the temptation which is constantly offering itself to the indulgence of my idle habits.
The fine weather is come opportunely for your vacation. I suppose you will commence your travels without much delay. I hope we shall meet at Gatcomb before you return home.
Believe me,Ever truly yours,David Ricardo.
Gatcomb Park,9th Aug., 1816.
My dear Sir,
I am obliged to you for the interest you have taken about my boat.... I am glad that Mrs. Malthus and Miss Eckersall were pleased with their excursion to Easton Grey and Gatcomb. They and you would have better satisfied me that your visit was agreeable if you had not been in so great a hurry to put an end to it. Our friends at Easton Grey have been staying a few days with us, accompanied by Mr. Binda. We expected Mr. Warburton to join them here, but he wrote to delay his journey for a couple of days.... He appears pleased with the idea of his journey to Italy, though Mrs. Austin, who is returned, did not fail to represent in the strongest colours the disagreeables which she encountered. He I daresay is a very good traveller, and my daughter I have always thought the very worst I ever met with.
The Smiths leave Easton Grey on Monday for London. I suppose you have heard that they are going with Mr. Whishaw to the Netherlands and Holland. They will I am sure be very much delighted with their excursion. They always go a journey, as indeed I think they travel through life, with a disposition to be pleased. They view everything through a favourable medium, and are not eager to spy out the defects of every object they encounter.
I have no difficulty in agreeing with you 'that the rate of profits of stock depends mainly on the demand and supply of stock compared with the demand and supply of labour,' if by those words you mean the rise or fall of wages. That is my identical proposition. Now, if labour rises, no matter from what cause, profits will fall; but there are two causes which raise the wages of labour,—one the demand for labourers being great in proportion to the supply,—the other that the food and necessaries of the labourer are difficult of production or require a great deal of labour to produce them. The more I reflect on the subject the more I am convinced that the latter cause has an incessant operation. It is very seldom that the whole additional produce obtained with the same quantity of labour falls to the lot of the labourers who produce it; but, if it should, I should yet contend that the rate of profits would fall because the price of corn would fall with such an increased facility of production; capital would be withdrawn from the land, rents would fall, and profits rise. The causes you mention may operate in Poland and America; I have never denied it. The proportion between labour and capital will undoubtedly affect profits, because it will affect wages; but it is not the only element in the consideration of the subject of profits; there are other causes which also affect wages. Whether that demand can be general which increases price must, I apprehend, depend on whether the precious metals can be furnished as rapidly as other commodities. If thesavings or acquisitions of labour are exchanged for all commodities in the same proportion, and the demand should increase in that proportion also, I can see no reason why any commodity should rise; but, if the demand for cloth or gold be either greater or less than the supply, they may rise or fall in their exchangeable value. That is to say, their market value might rise or fall; but their natural value would probably undergo little variation, and therefore after a time they would exchange at their usual rates. A new value thrown in the market always supposes a certain quantity of sales as well as purchases; if no part of that value consists of the precious metals, I do not see how all commodities could rise. I should expect some to rise and some to fall, but the general tendency would rather be to the latter.
Ever truly yours,David Ricardo.
....
Gatcomb Park,5 Oct., 1816.
My dear Sir,
Notwithstanding the bad weather I have not failed to enjoy myself, for I have been to Cheltenham, Malvern, and Worcester, and latterly to Bath. To be sure the continued rains make it less pleasant than it otherwise would be, but, as I am not at a loss for amusement within doors, I contrive to take my walks while it is fine, and return to my library with the recommencement of rain....
I hope your additional volume will soon follow your new edition of the old work[138]. I shall be glad to see in a connected form your matured opinions on the progress of rent, profits, and wages, and in what manner they are affectedby the increasing difficulty of procuring food, by the increase of capital, and the improvement of machinery. I fear we shall not agree on these subjects, and I should be very glad if we could fairly submit our different views to the public, that we might have some able heads engaged in considering it [sic][139]. Of this, however, I have little hope, for though I feel strongly the truth of my theory I cannot succeed in stating it clearly. I have been very much impeded by the question of price and value, my former ideas on those points not being correct. My present view may be equally faulty, for it leads to conclusions at variance with all my preconceived opinions. I shall continue to work, if only for my own satisfaction, till I have given my theory a consistent form.
You say that you think I have sometimes conceded that if population were miraculously stopped, while the most fertile land remained uncultivated, profits would fall upon the supposition of an increase of capital still going on. I concede it now. Profits I think depend on wages,—wages depend on demand and supply of labour, and on the cost of the necessaries on which wages are expended. These two causes may be operating on profits at the same time, either in the same, or in an opposite direction. In the case you put wages would have a tendency to keep stationary as far as the supply of food was concerned, but they would have a tendency to rise in consequence of the demand for labour increasing, whilst the supply continued the same. Under such circumstances profits would of course fall. You must, however, allow that this is an extraordinary case, and out of the common course of events, for the tendency of the population to increase is, in our state of society, more than equal to that of the capital to increase. I shall be in London on Thursday or Friday next.... I should be glad if some fortunate accident were to take you to town at the same time. If so let me know where you are to be found; a line directed to the Stock Exchange will be certain to find me. We shall not finally leave the country till January or February. I wish you would come and see a little more of Gatcomb during your Xmas vacation....
Ever truly yours,David Ricardo.
Bow, Middlesex,11 Oct., 1816.
My dear Sir,
I arrived in London this morning and found your kind letter, which I ought to have answered immediately, as you could not otherwise know whether I accepted your kind invitation, before the time that you might expect me. The truth is I forgot the day of the week, and was not aware till I got home that we were so near Saturday. I very much regret that I shall not be able to avail myself of Mrs. Malthus' and your kindness, as I have engagements here which will prevent me from leaving town till I return to Gatcomb.
You mistake me if you suppose me to say that under no circumstances of facility of production profits could fall. What I say is that profits will rise when wages fall, and, as one of the main causes of the fall of wages is cheap food and necessaries, it isprobablethat with facility of production, or cheap food and necessaries, profits would rise. At the very time that the labour of a certain number of men may produce on such land as pays no rent 1100 instead of 1000 quarters of corn, and when corn falls in consequence from £5 to £4 10s.per quarter, the money as well as the corn wages of labourmayrise, for capitalmayhave increased at a very rapid rate, and labourers at a slow rate, in which case profits would fall and not rise. Under these very peculiar circumstances of higher money wages with a lower price of necessaries, the wages of labour would be in an unusual state, and would shortly revert to the old standard, when profits would feel the benefit. All I mean to contend for is that profits depend on wages, wages under common circumstances on the price of food and necessaries, and the price of food and necessaries on the fertility of the last cultivated land. In all cases it is perhaps true that rent will depend upon the demand compared with the supply of good land, and wages on the demand compared with the supply of labour, if it be allowed that the price of necessaries influence[s] the demand and supply of labour.
I do not quite understand the expression that profits depend on the demand compared with the supply of capital. What would you say of two countries in [which] there are precisely equal capitals, where wages [are] also equal, and where the population is precisely in the same number. Would the demand compared with the supply of capital be the same in both? If you say they would, I ask whether their rate of profits would be the same under any other supposition but that of their land being exactly of the same degree of fertility? To me it appears quite probable that the ordinary and usual rate of profits might in one be 20 and in the other only 15 per cent., or in any other proportions....
Believe me,Ever yours,David Ricardo.
London,14th Oct., 1816.
My dear Sir,
My stay in London will not be prolonged beyond Friday next. I hope it will be convenient to you to come up before. On Thursday I shall be disengaged and will meet you at any place in London that may best suit you, unless you will dine with me at my brother's at Bow. His house is small, and I fear he has not, now we are with him, a spare bed to offer, and you may not like to travel so far at night. If so, let us meet in the city and get our dinner there.
The money wages of labour are, I apprehend, generally regulated by facility of production. With an abundant production too I think that a less proportion of the whole will be given to the landlords, and more will remain for the other two classes, of capitalists and labourers; but of this increased quantity a greater proportion will be given to capitalists and a less proportion to labourers. Now, though what you call the real wages of labour[140](but which I think a wrong term) will increase, the money wages will fall. But this will not be the case with profits; what you would call real profits would increase, but so would also money profits. Under the circumstances then that I have supposed, the rate of profits would rise though money wages would fall. The difference between us is this. I say that with every facility or difficulty of production, of the quantity of necessaries, that is to be divided between profits and wages, different proportions will be given to each, and that money will accurately show those proportions. You appear to meto think that profits do not depend on the division of the produce, and that money wages may as often rise with facility of production as fall.
You state the real question fairly; it is, 'What is the main cause which determines the rate of profits under all the varying degrees of productiveness?' You do not appear to me [to] solve the question when you answer 'that it is the proportion which capital bears to labour.' In a rich country where profits are low, and where a great portion of produce is paid to the landlords for rent, the proportion of labour to capital will be the greatest, and yet according to your theory it should be the least. You will not, I think, deny that in a country where labour is high a manufacturer would employ more capital to produce the same commodities than what he would do in a country where wages were low, and there also would profits be low; that is to say, profits are high where capital bears a large proportion to labour, and low where labour bears a large proportion to capital.
I am writing amidst the noise of the Stock Exchange, and very much fear that I shall be more than usually incomprehensible.
Ever yours,David Ricardo.
Gatcomb Park,3rd Jan., 1817.
My dear Sir,
A long time has elapsed since I had the pleasure of seeing you, during which time I have often intended writing, as I did not hear from you; but my natural indolence prevailed, and I have procrastinated it till now. I had some faint hopes that you might be in the neighbouring county this vacation, in which case I should have hoped toprevail on you to pass a short time here; but I learnt from Mr. Binda, who is on a visit to Mr. Smith, that he had met with you at Holland House, and that it was not probable you would go far from home. I had previously enquired about you of our young neighbour George Clerk; he, however, could only tell me you were well; he knew nothing about your intended movements.
By an advertisement in the public papers I perceive that you have been occupied in writing about your College[141], which I regret, as I believe the task was not very agreeable to you, and as it may have prevented you from proceeding with other works in which I imagine you are more interested. I should be glad to hear that everything you think defective in the College was remedied, and that it was placed on such a footing as to require only the ordinary routine of your attention.
I have been occasionally employed, since we met, in putting my thoughts on paper, on the subjects which have often passed under our discussion. I have encountered the usual obstacles from difficulties of composition; but I have resolutely persevered till I have committed everything to paper that was floating in my mind. There are a few points on which there is a shadow of difference between my present and my past opinions; but they are not those on which we could not agree. I hope I shall succeed in putting my MS. in some tolerable order, as on that will depend whether I shall again appear before the public. What I have hitherto done is rather a statement of my own opinions than an attempt at the refutation of the opinions of others. Lately, however, I have been looking over Adam Smith, Say, and Buchanan, and where I have seen passages in their works contrary to the principles I hold to be correct I have noticed them, and shall perhaps make them the subject of some comment.
I fear I shall not have the satisfaction of receiving your acquiescence to my doctrines, particularly as I have reverted to my former views respecting taxes on raw produce. Whatever may be correct on that subject, surely Adam Smith is wrong, as there are various passages in his book inconsistent with each other.
We shall, I hope, soon meet and renew our discussions on some of these difficult matters. I shall be in London on Friday next, and hope to see you in Brook Street as our inmate, as soon after that day as business or inclination may draw you to London.
I want to hear your opinion of the measures lately adopted for the relief of the poor[142]. I am not one of those who think that the raising of funds for the purpose of employing the poor is a very efficacious mode of relief, as it diverts those funds from other employments which would be equally if not more productive to the community. That part of the capital which employs the poor on the roads, for example, cannot fail to employ men somewhere, and I believe every interference is prejudicial....
Believe me,Ever yours,David Ricardo.
Upper Brook Street, London,24 Jan., 1817.
My dear Sir,
I have read your pamphlet[143]with great pleasure, and am very much satisfied with your arguments in favour of a college in preference to a school for the education of the young men destined to manage the complicated affairsof our Indian Empire. The testimonies from India in favour of the young men sent from the College, as compared with those who went out to India before the establishment of the College make powerfully for you, and do not appear to have been answered by your opponents. I observe by the papers that the discussion on this subject will be renewed at the India House on the 6th February, at which time I conclude that you will be in London. If so, I hope you will make my house your headquarters. Mr. Murray promised to send copies of your book to the gentlemen you directed me to mention to him.
It appears to me that one great cause of our difference in opinion on the subjects which we have so often discussed is that you have always in your mind the immediate and temporary effects of particular changes, whereas I put these immediate and temporary effects quite aside, and fix my whole attention on the permanent state of things which will result from them. Perhaps you estimate these temporary effects too highly, whilst I am too much disposed to undervalue them. To manage the subject quite right, they should be carefully distinguished and mentioned, and the due effects ascribed to each.
I have been reading again your three last pamphlets on rent and corn, and cannot help thinking there is some ambiguity in the language. The word [sic], 'high price of raw produce,' is calculated to produce a different impression on your reader from what you mean. Your first and third causes of high price appear to me to be directly at variance with each other. The first is the fertility of land, the third the scarcity of fertile land. The second cause too, I think, never operates[144]. There is one passage in particular which expresses fully my opinions. I have not the book by me, and cannot refer you to thepage, but it begins, 'I have no hesitation in stating that independently of irregularities in the currency,' etc. It is in the essay on Rent[145].
Surely Buchanan is right and your comment[146]wrong; rent is not a creation but a transfer of wealth. It is the necessary consequence of rent being the effect and not the cause of high price[147].
Say and I would say that by turning revenue into capital we shall obtain both an increased supply and an increased demand; but, if the same capital be so created, I do not approve of its present application, and taking it out of the hands of those who know best how to employ it, to encourage industry of a different kind and under the superintendence of those who know nothing of the wants and demands of mankind, and blindly produce cloth or stockings of which we have already too much, or improve roads which nobody wishes to travel....
Very truly yours,David Ricardo.
My dear Sir,
I am not in the least acquainted with the subject on which your papers[148]treat, but that is no reason why I should not mention what appears to me defective. In page 8[149]you add 1/6 to the births for probable omissions, and 1/12 for deaths; but you do not tell your reader why these proportions aretaken rather than 1/4 or 1/3, nor can I discover on what grounds those numbers are chosen.
You sometimes take averages from the known facts of certain years; but your averages are formed on an arithmetical ratio while your application is to a geometrical series. I submit whether this is correct.
If, as you say in page 14[150], births are to burials as 47 to 30, and the mortality as 1 to 47, the addition to the population would be little more than 1/82 instead of 1/83, for out of every 1410 persons 30 would die and 47 would be born, and consequently there would be an increase of 17; but 1410 divided by 17 is 82.94, or 83 nearly; and therefore, if 1410 gives an increase of 17, 9,287,000 will give an increase of 111,970, or 1,119,700 in ten years, which will raise the population 9,287,000 + 1,119,700 = 10,406,700 instead of 10,483,000[151].
In page 16[152]the mortality is supposed to be as before, 1 in 47, and the births to the population as 1 to 29½, and the population to be 9,287,000. This latter sum divided by 29½ gives 314,813 the annual number of births, and divided by 47 gives 197,595 the annual number of deaths; deduct one from the other (197,595 from 314,813) gives 117,218 for the annual increase, which in ten years would be 1,172,180, which added to the former population of 9,287,000 gives 10,459,180 instead of 10,531,000.
I have marked in pages 35 and 36 some very trifling errors. These are all I can discover with the facts which are before me.
Ever truly yours,David Ricardo.
8 Feb., 1817.
London,21 Feb., 1817.
My dear Sir,
I am very sorry that you were prevented from being in London yesterday. I fully expected to see you, as I thought the subject of debate at the India House was of too much interest not to make you desirous of hearing it.
Mr. Grant[153]was, I assure you, a warm advocate in the cause of the College. He spake admirably and with great effect, improving in energy and eloquence as he proceeded. He did justice to the various qualifications of the professors for the responsible situations which they filled, and I believe left nothing unsaid which might assist the cause which he so ably defended. I thought him very severe on Randle Jackson, who will find it difficult to answer some parts of his speech. In the Times the report of what he said is very correct, as far as it goes; but it is necessarily a very abbreviated statement. Mr. Kinnaird[154]began by speaking in the most respectful manner of you, and indeed in terms of great eulogy, but afterwards I think absurdly dwelt on your being an interested party and an advocate for the college, and imitated Mr. Jackson in his irony on those whom he first declared were highly deserving of respect. In what manner could we have any correct account of the college and its concerns but from an interested party? Who could speak of its management, attainments, and discipline, but those who were acquainted with it? He, however, gave up the only strong grounds they had (if they had been true) for inquiring into the affairs of the college, for he said that he had no idea that there was more immorality and profligacy in the East India College than in any other seminary;neither did he say anything of a want of proficiency in the students; but his main argument was built on the general principle that a supply of intellectual attainments will as surely follow an effectual demand for it, as the supply of any material commodity will follow effectual demand.
Mr. Grant, I should mention, supported a directly contrary principle. Mr. Kinnaird dwelt very much on the compulsion under which parents were of sending their children to this particular institution. He seemed to me to adopt Mr. Mill's view of the subject, and his argument would have been quite as applicable to all colleges if parents were compelled to send their children to them. He passed over the compulsion under which parents were to send their children to college, who wished to bring them up to the church, etc. In a few minutes' conversation which I had with him after the debate I urged this objection, and he answered that they had a choice among a large number of colleges, whereas in your case they were confined to this one.
He finished by assuring me that my friend had a bad cause, that it could not be defended and must fall. Mr. Impey's speech was badly timed; he should not have immediately followed Mr. Grant, for he could not then say anything new, nor could he repeat anything that had been said half as well as Mr. Grant had said it before. The debate will be renewed on Tuesday. If you should come up, I shall expect you in Brook Street. If I do not see you, and you are disengaged on the Saturday evening following, I shall be glad to pass a day with you, commencing my visit at that time....
Very truly yours,David Ricardo.
London,9th March, 1817.
My dear Sir,
I leave London to-morrow morning very early for Gloucestershire, from whence I shall return some time before your next meeting at the King of Clubs, so that I hope you will do me the favour to come to Brook Street when you visit town on that occasion.
... This letter will accompany that part of my MS.[155]which refers to you. I hope I have not in any respect misapprehended you; and, however we may differ in opinion on the subjects that we have so often discussed, I trust you will not think that I have exceeded the bounds of fair criticism in my remarks on the passages of your pamphlets which I have selected for animadversion. The printing goes on briskly. We have had a sheet a day since the commencement, and eleven sheets are now corrected. In their printed form they appear worse, in my eyes, than before; and I need all the encouragement of my partial correctors[156]to keep alive a spark of hope respecting their reception. I wish it were fairly out of my hands; and, that it may not be delayed, I have taken every precaution that it shall proceed uninterruptedly in my absence. As yet I have no misgivings about the doctrines themselves; all my fears are for the language and arrangement, and above all that I may not have succeeded in clearly showing what the opinions are which I am desirous of submitting to fair investigation.
I hope that college affairs will no longer occupy an undue proportion of your attention, but that you will be able to give a finishing hand to the works which you are about to publish. Mrs. Marcet[157]will immediately publish a secondedition[158]. I have given her my opinion on some passages of her book, and have pointed out those which I know you would dispute with me. If she begins to listen to our controversy, the printing of her book will be long delayed; she had better avoid it, and keep her course on neutral ground. I believe we should sadly puzzle Miss Caroline, and I doubt whether Mrs. B. herself could clear up the difficulty.
From some conversation which I had yesterday morning with Mr. Murray, it appears that Torrens has been offering his book to him; but Murray is very lukewarm in the negotiation, and really very much underrates Torrens' talents. He thinks that the sale of Torrens' best work, that on corn[159], was very limited; he talked of it's not having exceeded 150 copies. Since writing the above I have seen Mr. Hume[160]; he tells me that he has heard that the directors are about to institute an inquiry into the state of the college themselves....
Very truly yours,David Ricardo.
London,22 March, 1817.
My dear Sir,
I have been expecting you, both yesterday and to-day, and it is only after a most laborious calculation that I am led to suspect that the meeting of your Club is not till next Saturday. Next Friday then, or any earlier day, I hope we shall see you in Brook Street; and I am desired by Mrs. Ricardo to say that, if Mrs. Malthus will also favour us with her company, she will be very happy to see her. If you should come on or before Friday, theprinter will not before that day want that part of my MS. which I sent to you; but, if he uses due diligence, he will certainly be ready for it about that time. If you have any remarks to make on it which will require much consideration on my part, be so good as to send it me before, for, as the time approaches that I am to appear in print, I seem to become more dissatisfied with my work, and less capable to give any proposition contained in it a patient investigation.
It is now 5 o'clock; and, notwithstanding my doubts have been gathering strength since the morning, I am but just convinced, after tracing back with Mr. Hitchings the day you were last here, that I shall not see you this day.
In great haste, yours very truly,
David Ricardo.
We returned from Gloucestershire on Tuesday last.
London,26 March, 1817.
My dear Sir,
This morning I intended that my letter to you to-day should inform you that I would have the pleasure of passing next Saturday and Sunday with you at Haileybury; but a circumstance has taken place which will make it necessary for me to go to Bath on Friday next, from which place I shall again return to London early in the next week. As you say you will not be in town till after Easter, perhaps it will be convenient to you to see me at Haileybury on Saturday se'nnight. If so, I shall be with you on that day, at your dinner hour; and, if I do not hear from you before, I shall conclude that you have no engagement which will render my visit inconvenient.
I mean this day to put the last of my papers in the printer's hands, and hope he will be able to finish the printing before my visit to you; but of this I have somedoubt, as he does not proceed regularly at the same even pace.
I agree with you that, after having so often heard your opinions, in contradiction to mine, it would not be of much use just now, when my book is actually in the press, to enter again on your reasons for differing with me. I did not send you the manuscripts with any such intention. I merely wished you to see that part which related to you before I published, that I might not inadvertently misrepresent your statement. I cannot have the least objection to insert the note you mention[161], although I cannot but regret that we should differ so much as to the just and fair import of the wordsreal price. When you see my book altogether, you will not perhaps differ from me so much as you now think you do. You may, and I believe will, object to the correctness of many of my terms, as they will appear to you fanciful and not always properly applied; but, making allowance for such deviations, you will I am sure agree with much of the matter. On some points, indeed, there is no difference between us, and on others our chief disagreement would be in the mode of representing them. I have written this letter at intervals between other engagements, as I have been repeatedly interrupted. I now hear the postman's bell, and must hasten to conclude.
Very truly yours,David Ricardo.
My dear Sir,
I came up to London last night by the mail from Salisbury, and have just seen your letter. Mr. Whishawtold me when we last met that he was going to your house on Saturday, and I feared that my projected visit might, on account of numbers, be inconvenient to you.... You have, however, suggested the getting me a bed out of your house, with which I shall be well satisfied, let it be hard or soft, narrow or roomy.... Pray make no ceremony with me, and do not receive me if there be the least difficulty about the bed.
Yours very truly,David Ricardo.
London,3 June, 1817.
London,25 July, 1817.
My dear Sir,
I am just returned from my six weeks' excursion highly pleased with everything I have seen. I very much regretted that you were not with me, as I am sure you would have been gratified with the towns of Flanders and the scenery of Namur, the Rhine and the castle of Heidelberg. I met Mr. Hamilton[162]at Luneville; he was going through the country that I had just quitted, and I hope he was as much pleased with it as I was. I fear that his engagements at the college made him devote less time to it than was required to enjoy all its beauties. We found that we were obliged to hurry over it with more expedition than we wished. Mrs. Ricardo has been at Gatcomb rather more than a week, and to-morrow I shall quit town and join her there. Since Tuesday morning when I left Paris I have been incessantly travelling in the day and have not devoted many hours to sleep. I shallnot be sorry to have a few days' rest. Your college was liberal to France, for I not only met Mr. Hamilton there but Mr. Le Bas[163]and the gentleman, whose name I forget, who teaches the French language at that institution[164].
I hope you have been enjoying your excursion and that you found less distress in Ireland than has been represented as existing there. The prospect of a good harvest is some consolation for the sufferings which the poor have been forced to endure; in every country of Europe they have endured much, and in every one they are anticipating a return of plenty.
M. Say was very much gratified with your present, and requested me to forward a letter and a small duodecimo volume which he has just published[165]. The letter I send you, but the book as well as his work on Political Economy, the 3rd edition of which he gave to me, has been detained at the Custom house at Dover, that they may have sufficient time to calculate the duty on them. As I did not wish to stay at Dover till the next day, I requested the master of the Inn to pay the duty and to forward them by Osman, who will be on his return from France in a few days. The book is an interesting little work in the manner of Rochefoucauld, and appears to me to be ably done. M. Say was very agreeable and friendly; he dined with me one day and I with him another. He is engaged in a commercial concern to which I believe he gives great attention.
I fear that it will be a long time before you and I meet, though I shall probably be in London once or twice in the next three months. I hope you will be disposed to bend your stops westerly in your winter vacation, and that youwill not fail to pay us a visit at Gatcomb; but not such a visit as the last,—I shall not be satisfied with a flying excursion. Perhaps Mr. Whishaw will favour me with his company at the same time; if so, with the assistance of my friend Smith, we should, I hope, contrive to make the time pass agreeably to both of you. Being very tired and very sleepy I hasten to conclude.
Very truly yours,David Ricardo.
Gatcomb Park,4 Sept., 1817.
My dear Sir,
I thank you very much for your kind letter of the 17th August. I am pleased to hear that your journey to Ireland turned out so well. The account you give of the improvements before the check which they received during the last two years, as well as of the situation of the people, agrees exactly with what I should expect to find. Humbold[t] in his account of New Spain[166]points out the very same evils as you do in Ireland, proceeding too from the same cause. The land there yields a great abundance of Bananas, Manioc, Potatoes, and Wheat, with very little labour, and the people, having no taste for luxuries and having abundance of food, have the privilege of being idle. No other advantage would I think result from the disposable labour being employed in manufactures than in preventing its being turned to profligate and mischievous pursuits, dangerous to the public peace. Happiness is the object to be desired, and we cannot be quite sure that, provided he is equally well fed, a man may not be happier in the enjoyment of the luxury of idleness than in theenjoyment of the luxuries of a neat cottage and good clothes. And after all we do not know if these would fall to his share. His labour might only increase the enjoyments of his employer.
Mr. Smith has heard from Mr. Whishaw; he was at Paris when he wrote, on the eve of recommencing his journey. I hope he may enjoy his tour. It is a pity that he is without an agreeable companion; he is of so sociable a disposition that he would have had pleasure in communicating his feelings and comparing them with these of another intelligent person. Mr. Smith has also heard from Mr. Warburton, who has set out on the very same tour that I have been taking, with the addition of Holland, through which country he means to pass. He has a very intelligent companion in Dr. Woolaston[167].
At the very moment that we were beginning to despair of the weather it has changed and is now beautiful. Our hopes will I trust not be disappointed, and we shall be enabled safely to house the abundant crops with which our lands in every country (sic) are loaded. I doubt whether we have, even during the late distresses, ceased to advance as a nation in wealth; but at present I think no one can doubt that we are again making forward strides in prosperity. A bad harvest does not perhaps very much check the progress of wealth; but it materially interferes with the general happiness.
You flatter me very much by your second perusal of my book; and I am happy to find that there are but a very few important points on which we materially differ. I certainly allow that my theory of value does not hold good in different countries when profits are different. If you look to page 156 and the following pages you will see my ideas on that subject[168].
It is only yesterday that I received the book from Dover which M. Say entrusted me with for you; I send that and this letter together by Mrs. Ricardo, who is going to London for a few days; she has undertaken to send my parcel to the Hertford coach.
... If you go to Bath and do not come over to us I shall not know how to forgive you.
I have heard lately from Mill; he is still hard at work in correcting the press (sic) and finishing his book[169]. He tells me that Sir Samuel and Lady Romilly are expected at Ford Abbey. I fully expect that I shall see him here before he returns to London. I do not know when I shall be obliged to go to town, but whenever it may happen I will let you know, as I would not willingly forego any chance of meeting you. Mr. Smith's house is the centre of attraction for all his able London friends, and he is kind enough always to allow me to participate in the pleasure which their company affords him. We have already had Mr. Warburton and Mr. Belsham, and in a few days he expects to see Mr. Mallet. Mr. Smith continues to reign pre-eminent in the good-will of all his neighbours, and indeed I do not know any one who is entitled to dispute the palm with him....
Ever yours truly,David Ricardo.
This is a sad blundering letter, bad even from me, but you must excuse it, and will I am sure when I tell you that I am just recovering from the languor and weakness caused by the powerful medicines which I have been obliged to take.... The night before last I was very ill; yesterday I was better, and to-day I have no complaint left but weakness.
Gatcomb Park,10 Oct., 1817.
My dear Sir,
I said I would write to you when I was going to London and therefore I now do it, but without much hope of seeing you there.... It is not my intention, if I can get my business done, to stay in town beyond Tuesday morning, unless I had any chance of meeting you there, which would induce me to defer my return home one day longer.... Dr. Roget[170]has been on a visit for a few days at Mr. Smith's; he stayed one evening with us at Gatcomb. We all very much admire his unassuming manners, and are well disposed to admit his claims on our esteem and affection. Sir Samuel Romilly and Lady Romilly have been on a visit at Mr. Phelps' a near neighbour of mine. They went from here to Bowood[171]and from thence they were going to Ford Abbey, Mr. Bentham's residence. I have since heard of their arrival there, and they are now probably returned to London.
... Our harvest in this part of the country is almost entirely got in. The crops are I believe generally good, and we are very grateful for the fortunate change in the weather which enabled us to reap and house them in a state of perfection. We shall now, I hope, for some years sail before the wind. You and I have always agreed in our opinions of the power and wealth of the country; we were not in a state of despair at the discouraging circumstances with which we were lately surrounded. We looked forward to the revival which has taken place....
Ever truly yours,David Ricardo.
If you should write me a line, it will reach me sooner by being directed to the Stock Exchange.
Gatcomb Park,21 Oct., 1817.
My dear Sir,
I hope we shall be more fortunate in meeting, when I again visit London.
You think that the low price of labour which has lately prevailed contradicts my theory of profits depending on wages, because the rate of interest is at the same time very low. If interest and profits invariably moved in the same degree and in the same direction, my theory might be plausibly opposed; but I consider this as by no means the case. Although interest is undoubtedly ultimately regulated by profits, rising when they are high and falling when they are low, yet there are considerable intervals during which a low rate of interest is compatible with a high rate of profit; and this generally occurs when capital is moving from the employments of war to those of peace. If goods do not vary in price and the cost of manufacturing them falls, it is self-evident that profits must rise; and, if goods do fall in price generally, then it is not the value of goods or of labour which falls, but the value of the medium in which they are paid which rises, and then my theory does not require any rise of profits; they may even fall.
You ask me if I can show you the fallacy of the following statement: 'Capital is wholly employed in the purchase of materials and machinery and the maintenance of labour. If, from any cause whatever, materials, machinery and the maintenance of the labourer and his wages fall considerably in money value, is itpossiblethat the same amount of monied capital can be employed in the country?' I answer that it ispossiblebut by no means probable. Suppose the mines were to produce a diminished quantity of the precious metals, at the same time thatmaterials and machinery were greatly increased in quantity, might not the increased aggregate quantity of materials and machinery be of a greater money value than before, although each particular portion should be at a less? Might we not by importation appropriate to ourselves a larger proportion of the mass of money distributed amongst all the countries of the world? I cannot doubt thepossibilityof the case.
In your argument about the stimulus of increased value and the effects of demand and supply on future wealth, you do not really differ from my views on this subject so much as you suppose, for I make profits and wealth to depend on the real cheapness of labour, and so do you, for you say that the evils of a dearth will often be more than counteracted as regards wealth, by the great stimulus which it may give to industry. I say the same, for I contend that the evils of a dearth fall exclusively on the labouring classes, that they perform frequently more labour not only without receiving the same allowance of food and necessaries, but often without receiving the same value for wages or the same recompense in money, whilst everything is dearer. When this happens, profits, which always depend on the value of labour, must necessarily rise.
I thought I had written to you about the additional matter in your excellent work[172], although I had not given it all the examination I intended. I read it as I was travelling and noticed the pages wherever I saw the shadow of a difference between us, that I might look at the passages again when I got home and give them my best consideration[*][173]. On my passing through London when I returned from France, I looked for your book, as I expected you had sent me a copy, which I think youkindly told me you would do; but Mrs. Ricardo had jumbled that and many other books in a wardrobe, and it could not be got at till I went to town. I have it now here and have been reading all the new matter again, and am surprised at the little that I can discover, with the utmost ingenuity, to differ from.
*[Foot-note, eventually ousting the text.] In every part you are exceedingly clear, and time only is wanted to carry conviction to every mind. The chief difference between us is whether food or population precedes. I could almost agree with the statement of the question in p. 47 of third vol., which I think is in strict conformity with Sir J. Steuart's opinion. In speaking of the fall of wages you only once mentioncornwages, but must always mean corn wages and not money wages. In the note to p. 438 of the third vol. you agree to my doctrine, but I think in pp. 446, 456 and 457 you forget the admission you had before made, 497 [sic]. You agree with Smith that the monopoly of the Colony trade raises profits. 502 is in my opinion wrong and inconsistent with 438. I differ a little from your views in 506. You do not always appear to me to admit that the tendency of the Poor Laws is to increase the quantity of food to be divided, but assume in some places that the same quantity is to be divided among a larger number. I can neither agree with Adam Smith nor with you in 326, 328: a maximum tends to discourage future production; an undue increase of wages, or poor laws, tend to promote it. 360, a fall in the price of commodities and a rise in the value of money are spoken of as the same thing. 361, a diminution of production is another way of expressing an abatement of demand. 371, a combination among the workmen would increase the amount of money to be divided amongst the labouring class. These you will observe are slight objections, and I make them that I may preserve my consistency. They wouldnot be understood by the mass of readers, but to you who are acquainted with mypeculiarviews, if you please, they need no explanation....