70.: ricardo to malthus1[Reply to 67.—Answered by 72] - David Ricardo, The Works and Correspondence of David Ricardo, Vol. 6 Letters 1810-1815 
The Works and Correspondence of David Ricardo, ed. Piero Sraffa with the Collaboration of M.H. Dobb (Indianapolis: Liberty Fund, 2005). Vol. 6 Letters 1810-1815.
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ricardo to malthus
[Reply to 67.—Answered by 72]
Gatcomb Park 18 Decr. 1814
My dear Sir
Since I recd. your last letter I have been unexpectedly called from home, besides having had friends staying with me, which have prevented me from writing sooner. I have been twice to Bath and once to Cheltenham, and have also been as far as Devonshire to the old Abbey which Mr. Bentham at present inhabits. I accompanied Monsr. Say the author of Economie Politique on a visit to him and Mr. Mill, —and had it not been for the incessant rain, we should have had a very pleasant excursion.
Monsr. Say came to me here from London at the request of Mr. Mill who wished us to be acquainted with each other. He intends seeing you before he quits this country. He does not appear to me to be ready in conversation on the subject on which he has very ably written,—and indeed in his book there are many points which I think are very far from being satisfactorily established,—yet he is an unaffected agreeable man, and I found him an instructive companion.
We intend to be in London in the middle of Jany. and have little doubt that we shall return here quite time enough to receive a visit from Mrs. Malthus and you next summer vacation, so I trust you will not project an excursion to any other quarter.
I perceive that we are not nearly agreed on the subject which we have been lately discussing. I have been endeavoring to get you to admit that the profits on stock employed in Manufactures and commerce are seldom permanently lowered or raised by any other cause than by the cheapness or dearness of necessaries, or of those objects on which the wages of labour are expended. Accumulation of capital has a tendency to lower profits. Why? because every accumulation is attended with increased difficulty in obtaining food, unless it is accompanied with improvements in agriculture; in which case it has no tendency to diminish profits. If there were no increased difficulty, profits would never fall, because there are no other limits to the profitable production of manufactures but the rise of wages. If with every accumulation of capital we could tack a piece of fresh fertile land to our Island, profits would never fall. I admit at the same time that commerce, or machinery, may produce an abundance and cheapness of commodities, and if they affect the prices of those commodities on which the wages of labour are expended they will so far raise profits;—but then it will be true that less capital will be employed on the land, for the wages paid for labour form a part of that capital.
A diminution of the proportion of produce, in consequence of the accumulation of capital, does not fall wholly on the owner of stock, but is shared with him by the labourers. The whole amount of wages paid will be greater, but the portion paid to each man, will in all probability, be somewhat diminished.—
I do not recollect ever having allowed that an extension of foreign commerce will take capital from the land, unless we were an exporting country as far as regards corn, in which case my proposition would be true, namely That the rate of profits can never permanently rise unless capital be withdrawn from the land. I am not sanguine about the principle, if true, being of any use; but that is another consideration;—its utility has nothing to do with its truth, and it is the latter only which I am at present anxious to establish.
I cannot agree with you when you say that “without supposing capital to be taken from the land the throwing of new objects of desire into the market will increase the value of the whole mass of commodities in the country, estimated either in money, or in corn and labour,”—and it is because I think that there will not be a greater value of commodities to be exchanged for the raw produce, or for money that I conclude no increased profits will any where be made. If the mass of commodities be increased we diminish their exchangeable value as compared with those things whose quantity is not augmented. If we double the quantity, or rather double the facility of making, stockings, we diminish their value one half, as compared with all other commodities. If we do the same with regard to hats and shoes, we restore the accustomed relations between stockings, hats, and shoes, but not with respect to other things. It is here I think, that our difference rests and I hope soon to hear all that you have to advance in favor of your view of the question.
Mr. Say, in the new edition of his book, Page 99 Vol. 1, supports, I think, very a[bly] the doctrine that demand is regulated by production. Dema[nd is] always an exchange of one commodity for another. The shoemaker when he exchanges his shoes for bread has an effective demand for bread, as well as the baker has an effective demand for shoes, —and although it is clear that the shoemaker’s demand for bread must be limited by his wants, yet whilst he has shoes to offer in exchange he will have an effective demand for other things,—and if his shoes are not in demand it shews that he has not been governed by the just principles of trade, and that he has not used his capital and his labour in the manufacture of the commodity required by the society,—more caution will enable him to correct his error in his future production. Accumulation necessarily increases production and as necessarily increases consumption. Accumulation of produce if properly selected may always be accumulation of capital, and it cannot fail to be worth more than it cost, estimated in corn or labour,—and this I think would be true although all our soldiers, sailors, and menial servants were employed in productive labour.—It appears to me that the consideration of money value may be the foundation of our difference on this point.—
I must leave room for a request which I hope you will not refuse. I dined a little while ago at Mr. Smith’s whom I first met at your house. Mrs. Smith told me that she had a collection of the hand writing of a great number of men who had distinguished themselves by their writings, and she wished that I would give her a letter of yours to add to her collection. Knowing that I had many which would not discredit you, I assented; but after I came home I thought I had no right to do it without your consent,—which I hope you will not refuse. I should be sorry to disappoint her, and should really cut a poor figure in making my apologies if I did, yet as my opinion, that I should not do it without your consent, is confirmed by Mrs. Ricardo, I must falter out my excuses if you are inexorable.
With kind regards to Mrs. Malthus I am
Ever Yours truly