182.: ricardo to malthus1[Reply to 181.—Answered by 183] - David Ricardo, The Works and Correspondence of David Ricardo, Vol. 7 Letters 1816-1818 
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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ricardo to malthus
[Reply to 181.—Answered by 183]
Bow Middx 11 Octr. 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 is probable that 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 £4.10 – pr. quarter, the money as well as the corn wages of labour may rise for capital may have 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 slowly 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 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 pct. or in any other proportions.
Pray give my kind regards to Mrs. Malthus and believe me