95.: malthus to ricardo1[Answered by 96] - 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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malthus to ricardo
[Answered by 96]
E I Coll May 5th 1815
My dear Sir,
You will find in page 298 and two or three following, some of the passages which I mentioned to you. Low profits and low rents are not a usual combination, and yet I am inclined to agree with Mr. Torrens that in the case supposed they would be united, though not to the advantage of the country. When it is considered that a fall in the price of corn would not occasion an equal fall in labour, and still less of an equal fall in the other advances of the farmer, such as timber bricks leather, &c: &c: I own it appears to me quite impossible that the profits of capital employed on the land should not diminish, notwithstanding a very great reduction of the cultivation, particularly as some of these advances of the farmer cannot fall very much, on account of the demand and difficulty of supply occasioned by a full population, and the necessary and permanent rise of price occasioned by taxation. Under these circumstances I really think that a fall in rent profits and wages at the same time would be compatible, though I should consider it as a great national misfortune. But, to leave this subject; I have been considering the case that we discussed when I had the pleasure of seeing you, and I am convinced that the effects of the facility of production supposed, would go exclusively to wages not profits; indeed I cannot help thinking that you are fundamentally wrong in measuring the rate of profits by the facility of production. For what in fact is meant by facility of production? It is that a days labour instead of producing two measures of corn cloth and cotton will produce four. And what is the natural consequence of this facility? why, that four measures of corn cloth and cotton are worth only the price of a days labour; and nothing can prevent this consequence, but a scarcity of capital compared with the means of imploying it profitably. But the means of imploying capital profitably can never coexist with an abundant capital and produce and a stationary population, on account of the necessary effect of such a state of things in increasing the real price of labour.
Facility of production (which includes of course, the facility of producing the materials of capital, and which tends therefore to make the other materials of capital besides labour as plentiful as the commodities produced for consumption) mainly affects the real wages of labour, and not the rate of profits; and if at any one time in the early periods of society population were to be stopped and accumulation were to go on, profits would fall extremely low although at the same time the labour of one man might be able to produce the food for ten or twenty. In this case everything would be in abundance and cheap except labour; and probably labourers would only work ¼ of their time and yet live luxuriously. This shews that profits do not depend upon facility of production, although they may be often high when the facility of production is great; because capital is often scarce, and generally so indeed, at the time that land is most productive.
The rate of profits depends upon the scanty or abundant supply of capital compared with the means of employing it profitably. And these means will upon the common principles of supply and demand be increased either by a diminution of capital, [or by] an extension of the market for it, by the opening of new channels of trade and by improvements in agriculture and manufactures, when accompanied as is almost invariably the case, by an increase of population and demand.
The principle of demand depending entirely on the power of production is true as long as each sort of commodity is in the proper proportions, and above all, food so as to keep up demand by a progressive population. But the principle is not true when population cannot be made to increase proportionally. If it be supposed stationary, capital may very easily increase beyond the powers of employing it productively.
I am interrupted by the Postman and must conclude.
Ever truly Yours
T R Malthus.
I hope we shall see you some time this month.