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• An Essay On the Influence of a Low Price of Corn On the Profits of Stock 1815
• Proposals For an Economical and Secure Currency 1816
• Section I: In the Medium of Circulation—cause of Uniformity Is Cause of Goodness
• Section II: Use of a Standard Commodity—objections to It Considered
• Section III: The Standard, Its Imperfections—variations Below Without Allowance of the Countervailing Variations Above the Standard, Their Effects— Correspondence With the Standard the Rule For Paper Money
• Section IV: An Expedient to Bring the English Currency As Near As Possible to Perfection
• Section V: A Practice Which Creates a Great Mass of Mercantile Inconvenience— Remedy Proposed
• Section VI: The Public Services of the Bank Excessively Overpaid—remedy Proposed
• Section VII: Bank Profits and Savings—misapplication—proposed Remedy
• Appendix
• Funding System an Article In the Supplement to the Fourth, Fifth and Sixth Editions of the Encyclopaedia Britannica 1820
• On Protection to Agriculture 1822
• Introduction
• Section I: On Remunerating Price
• Section II: On the Influence of a Rise of Wages On the Price of Corn
• Section III: On the Effects of Taxes Imposed On a Particular Commodity
• Section IV: On the Effect of Abundant Crops On the Price of Corn
• Section V: On the Effect Produced On the Price of Corn By Mr. Peel’s Bill For Restoring the Ancient Standard
• Section VI: On the Effects of a Low Value of Corn On the Rate of Profits
• Section VII: Under a System of Protecting Duties Established With a View to Give the Monopoly of the Home Market to the Home Grower of Corn, Prices Cannot Be Otherwise Than Fluctuating
• Section VIII: On the Project of Advancing Money On Loan, to Speculators In Corn, At a Low Interest
• Section IX: Can the Present State of Agricultural Distress Be Attributed to Taxation?
• Conclusion
• Appendix (a.): At a Court of Directors At the Bank. On Thursday 20th May 1819.
• Plan For the Establishment of a National Bank
• Notes From Ricardo’s Manuscripts 1818–1823
• Fragments On Torrens Concerning Value 1818
• Note On Fragments On Torrens
• (a 1): [ricardo On Torrens]
• (a 2): [torrens On Ricardo]
• (b): [an Entry In Ricardo’s Commonplace Book]
• A Note On Prices and Taxation 1821
• On Blake’s ‘observations On the Effects Produced By the Expenditure of Government’ 1823
• Note On the Papers On Blake
• [notes On Blake’s ‘observations On the Effects Produced By the Expenditure of Government’ 1823 With Blake’s Replies]
• [an Unfinished Review of Blake’s ‘observations On … the Expenditure of Government’ 1823]
• Absolute Value and Exchangeable Value 1823
• Appendix
• The ‘ingenious Calculator’
• Bullion Report.

(B)

[An Entry in Ricardo’s Commonplace Book]

Major Torrens under the signature of R in the Edinburgh Magazine for Oct^r. 1818 has observed as follows on Mr. Ricardo’s doctrine respecting exchangeable value

Dr. Smith says that “in that rude state of society which precedes both the accumulation of stock, and the appropriation of land, the proportion of labour necessary for acquiring different objects, seems to be the only circumstance, which can afford any rule for exchanging them for one another. If, among a nation of hunters, for example, it usually costs

In Mr. Ricardo’s book on the Principles of Political Economy in which his doctrine of value is given he says as follows

In the early stages of society, the exchangeable value of these commodities or the rule which determines how much of one shall be given in exchange for another, depends solely on the comparative quantity of labour expended on each.

Page [12]

Though Adam Smith fully twice the labour to kill a beaver which it does to kill a deer, one beaver should naturally exchange for, or be worth two deer. It is natural that what is usually the produce of two days or two hours labour, should be worth double of what is usually the produce of one day’s or one hour’s labour.”

Smith however limits this principle to the first and rudest period of society, and contends, that as soon as stock accumulates in the hands of particular persons who set industrious people to work by supplying them with subsistence and materials, the quantity of labour commonly employed in acquiring or producing any commodity is not the only circumstance which can regulate its exchangeable value in the market. This limitation of the principle is represented as a great and fundamental error by Mr. Ricardo, who contends that in the most advanced periods of society, as well as in that rude and simple state which recognized the principle that the proportion between the quantities of labour necessary for acquiring different objects is the only circumstance which can afford any rule for our exchanging them for one another, yet he limits its application to “that early and rude state of society which precedes both the accumulation of stock and the appropriation of land ”; as if, when profits and rent were to be paid, they would have some influence on the relative value of commodities, independent of the mere quantity of labour that was necessary to their production.

Adam Smith however has no where analyzed the effects of the accumulation of capital, and the appropriation of land, on relative value. It is of importance therefore to determine how far the effects which are avowedly produced on the exchangeable value of commodities, by the comparative quantity of labour bestowed on their production, are modified or altered by precedes the accumulation of stock, and the separation of the community into capitalists and labourers, the labour bestowed upon production is the only foundation of exchangeable value.

This is the radical difference between Dr. Smith and Mr. Ricardo.

Mr. Ricardo admits, that when equal capitals are of different degrees of durability, the products of equal quantities of labour will not be of equal value; and this he states as an exception to his general principle, that the labour expended on production determines exchangeable value: But as equal capitals seldom possess precisely equal degrees of durability, this, instead of limiting what he calls the general principle, subverts it altogether, and proves, that the relative worth of all things is determined, not by the quantities of labour required to procure them, but by the universally operating law of competition,

the accumulation of capital, and the payment of rent.

Page [22–3, n.]

Besides the alteration in the relative value of commodities, occasioned by more or less labour being required to produce them, they are also subject to fluctuations from a rise of wages, and consequent fall of profits, if the fixed capital employed be either of unequal value, or of unequal duration.

Page [53]

Thus we see, that with every rise of wages, in proportion as the capital employed in any occupation, consists of circulating capital, its produce will be of greater relative value than the goods produced in another occupation where a less proportion of circulating, and a greater proportion of fixed capital are employed.

Page [58]

It appears, then, that in proportion to the quantity and which equalises the profits of stock, and, consequently, renders the results obtained from the employment of equal capitals of equal value in exchange.

No proposition, physical or moral, can admit of a more rigid demonstration than the principles laid down by Dr. Smith, that, after stock has accumulated in the hands of particular persons who set industrious people to work by advancing them wages and material the quantity of labour employed in production is not the circumstance which determines the exchangeable value of commodities. durability of the fixed capital employed in any kind of production, the relative prices of those commodities on which such capital is employed, will vary inversely as wages; they will fall as wages rise.

Page [62–3]

It appears then that the accumulation of capital by occasioning different proportions of fixed and circulating capital to be employed in different trades, and by giving different degrees of durability to such fixed capital, introduces a considerable modification to the rule, which is of universal application in the early states of society.

Page [66]

A NOTE ON PRICES AND TAXATION 1821

The MS consists of a single half-sheet, one side of which is in Ricardo’s handwriting. At the bottom of it Trower writes ‘turn over’, and on the back of it he adds his own comments. The MS was found among Trower’s papers and later passed into Dr. Bonar’s possession. It was printed in Appendix B to Letters of Ricardo to Trower, edited by Bonar and Hollander, 1899.

[A Note on Prices and Taxation]

[Ricardo]

A B and C each lay out £100 p^r. Ann ^m. in Corn, when its price is 40/ p^r. quarter, they each buy 50 quarters. But Government imposes a tax of 10/- p^r. quarter on corn, and consequently the price of corn rises from 40 to 50 shillings, and the whole 150 quarters consumed will cost £375, instead of £300. In consequence however of the additional price, A, B, and C, can each, only purchase 40 quarters, instead of 50;—and therefore they will together purchase 120 quarters instead of 150. There will remain 30 quarters to be disposed of[,] which will be purchased by Government at the market price of 50/- and therefore for £75. This sum of £75 is precisely the sum which Government has raised by the tax of 10/- on 150 quarters, I think therefore I have shewn that although it is true that 150 quarters of corn will be disposed of for £375 instead of for £300 no additional quantity of money will be required for the purpose of purchasing it.—

[Trower]

No additional money is required to purchase it, because although more money is paid for the corn in consequence of the Tax, yet the cost of production of the corn, its natural price, is not increased. And the seller of the corn pays over to Government the extra price he receives in consequence of the Tax. This money, so paid to Government, is given to other persons, by whom that portion of the Corn is purchased, which used to be bought by the tax payers before the Tax was imposed.

So that the same £300 purchases the Corn whose price is raised by the Tax to £375. And it is enabled to do this in consequence of the increased ratio of its circulation, which the imposition of the tax occasions. Before the tax was imposed the 300 purchased 150 quarters of Corn for 300, now it first purchases 120 quarters @ 50/- amounting to 300; and then afterwards, that portion of it which was paid for the tax, vz^t. 75, purchases the remaining 30 quarters @ 50/- amounting to 75. So that that portion circulates twice where before the Tax was imposed it only circulated once.

Thus the only effect of the Tax is to take from the payers of it the power of purchasing 30 quarters of Corn, and to transfer that power to other persons; and this is effected by causing the money to pass through the hands of the seller of the Corn to Government and from Government to these other persons. The increase in the ratio of circulation is equal to the amount of the Tax—vz^t. 25 p C^t.

ON BLAKE’S ‘OBSERVATIONS ON THE EFFECTS PRODUCED BY THE EXPENDITURE OF GOVERNMENT’ 1823