174.: ricardo to malthus1[Reply to 172.—Answered by 178] - David Ricardo, The Works and Correspondence of David Ricardo, Vol. 7 Letters 1816-1818 [1816]
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The Works and Correspondence of David Ricardo, ed. Piero Sraffa with the Collaboration of M.H. Dobb (Indianapolis: Liberty Fund, 2005). Vol. 7 Letters 1816-1818.
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First published by Cambridge University Press in 1951. Copyright 1951, 1952, 1955, 1973 by the Royal Economic Society. This edition of The Works and Correspondence of David Ricardo is published by Liberty Fund, Inc., under license from the Royal Economic Society.
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174.
ricardo to malthus
[Reply to 172.—Answered by 178]
Gatcomb Park 9th. Aug. 1816
My dear Sir
I am obliged to you for the interest you have taken about my boat. It arrived here the latter end of last week and is now safely floating on Gatcomb water. I have been in it once, and found I could manage it alone; but the boat being larger, the sculls are also more bulky than Miss Eckersall’s and I now quite despair of ever rivalling her in dexterity of management. It is considerably larger than the boat I had before, and will not admit of the gate being shut when she is moored in the boat-house. We are planning some contrivance to obviate that inconvenience. I am very much indebted to Mr. Geo Eckersall for the trouble he gave himself, and I should write to him to say so, if I did not fear that I should thereby rather add to his trouble. When you write pray express my kind thanks to him.
I am glad that Mrs. Malthus and Miss Eckersall were pleased with our 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, and by that time the Smiths had returned home. He has however called at Gatcomb since. He must now I think have quitted Wiltshire. 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 all the disagreeables which she encountered. He I dare say 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 every thing through a favorable 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 the savings 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 great 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 Yrs.
David Ricardo
Pray give my best regards to Mrs. Malthus.
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