422.: ricardo to mcculloch1[Reply to 421.—Answered by 424] - David Ricardo, The Works and Correspondence of David Ricardo, Vol. 8 Letters 1819-June 1821 [1819]
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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. 8 Letters 1819-1821.
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422.
ricardo to mcculloch
[Reply to 421.—Answered by 424]
London 23 March 1821
My Dear Sir
I have been impatient for an opportunity to answer your last letter ever since I received it, but have never had one till this time, having been incessantly occupied either in the Agricultural Committee, or by my attendance in the House of Commons.
I must in the first place thank you for the frankness with which you express your opinion to me of the sentiments which you suppose me to have uttered in the debate on the appointment of the Agricultural Committee. I should estimate your letters much less highly than I do, if you did not freely animadvert on every part of my public conduct which you may think questionable, and particularly that part of it which should appear to you to compromise those principles of Political Economy for the maintaining of which I first entitled myself to your notice. If I should ever change my opinion I will manfully avow it, and trust I shall be able to give such reasons for the change as shall at least satisfy all candid men that I do so from a conviction of my error. In the present instance no such change has taken place, and in the speech, to which your letter alludes, I, boldly, and without any equivocation, defended all the doctrines on the corn trade which I have advanced in my book. It was my object to shew the absurdity of Mr. Curwen’s notions of a protecting or countervailing duty on the importation of corn, and I thought I did it successfully by my allusion to the manufacture of sugar from beet root in France during the war —I shewed that on his system the French Governmt. should have imposed a duty on the importation of West India sugar, after the peace, equal to the difference of the cost of manufacturing sugar in the West Indies and France. My argument appeared to make a great impression even on those who were absurd enough to be bewildered by such a doctrine as that of Mr. Curwen. I laid down my own principle of a countervailing duty, and which has been misrepresented in all the papers —I contended that it should not amount to more than the peculiar taxes to which the Agriculturist was subject, and on the same principle he should be allowed a bounty equal to those taxes on the exportation of corn—that thus the prices abroad, and at home, would be always nearly alike, and if we had an abundant harvest the farmer might export it without a great and destructive fall of price. I certainly did admit that we could not immediately adopt such a plan, but contended that all our measures should have that object in view. This I have always said and so have you—we have both agreed that we should not, immediately, and at once, jump from a bad system to a good one,—what we have contended for is that the good system should be never absent from our view, and that all our measures should enable us gradually to approach it. The newspapers have, and always do, misrepresent me,—I dare say the fault is mine in a great degree, for I speak very badly, and always hurry on too fast. In many parts of my speech I have been best reported by the British Press which I have endeavored to get to send to you but without success. With respect to the opinion I gave of our situation I have not been incorrectly reported—I uttered what I thought. I was answering Mr. Whitmore who represented our situation as almost desperate from the magnitude of our taxation, and the effects of the alteration in our currency. I said only what I thought, when I expressed an opinion that it would not be long before we saw a marked improvement in our condition. I do not attribute the distressed state of Agriculture to taxation, I believe that it might have been as bad, with the present corn laws, if we had not had a single tax to pay—abundance without a vent cannot fail to produce distress, but must it be lasting? I think not. You think otherwise because you are of opinion that capital will be constantly drawn away from this country whilst the corn laws are in force. I acknowledge the tendency of capital to flow from us, but I think you very much overrate it. I have always said that the desire to stay in our own country is a great obstacle to be overcome. You infer too strongly I think that profits abroad exceed profits here by the whole difference in the money price of corn. My opinion is this—if we were allowed to get corn as cheap as we could get it, by importation, profits would be very considerably higher than they now are; but this is a very different thing from saying that profits are very considerably lower here than abroad. It is quite possible (tho I do not believe it is true) that profits may be higher here than abroad. It is possible that the labour price of corn may be cheaper here than in the countries from which we should import corn if the trade were free and open. I have put the case in my book of a country having a very little superiority over its neighbours in the production of corn but a very great one in the production of manufactured goods. In such a country, notwithstanding a corn law, profits would be higher than in the neighbouring countries, and consequently no capital would flow from it, although it should refuse to import cheap corn. I beg you to observe that I do not say this is our case, I only say it might be our case, and I mention it to shew you that the rate of profits may not be so enormously different here and elsewhere as you are disposed to think. I acknowledge the tendency of the corn laws to send capital from the country—I acknowledge that our immense taxation has a tendency to produce the same effects, and I believe in my conscience that no measures could so much contribute towards our wealth and prosperity as repealing the corn laws, and paying off our debt, but though this is my opinion I am by no means ready to admit that we may not have a more limited measure of prosperity notwithstanding the continued operation of our corn laws, and the continued existence of our debt. In nothing that I have now said am I conscious of maintaining any opinion at variance with those principles which it has been my pride to advocate, and which I can assure you I am strenuously supporting against a host of adversaries, in the shape of witnesses, as well as members, in the Agricultural Committee.—I pray you not to judge me by the newspapers—my last speech as detailed by them on the currency is so unlike any thing I delivered that I scarcely recognise a sentiment of mine in it—I am sorry for this, but I know no remedy for it.—
In my speech on the corn laws I recommended an open trade on the principle I have already stated, and I further said that whilst any corn law existed it should not be on the present footing, which had the effect of alternately giving us a glut of corn, and then a scarcity and high prices—that next to an open trade a fixed and permanent duty was desirable provided it were only moderately higher than the limit I had pointed out. Such a regulation would at least give us steady prices, but in adopting it we should never lose sight of the principle that free trade was our true policy. If the opinion of so humble an individual as myself can be of any importance to any one, you have my free consent to state in your paper as from authority that the sentiments which I have already expressed are those which I endeavored to convince the house were the correct ones. You may possibly be startled at the idea of giving a bounty on the exportation of corn, I have not now time to give you my reasons for such an opinion but shall only say that no protecting duty can at any time be justifiable unless it be allowed to draw it back on exportation:—the freedom of trade in fact requires a bounty to such an amount. You ask [“Why] ask the minister to abolish taxes or to relax the barbarous restraints on trade, if we have already nearly got the better of all our difficulties, and are about to enter the haven of prosperity”? I answer, because I am not contented with a little prosperity if I can obtain a great deal for my country. My opinion was given also in reference to the currency question, to which all our misfortunes are frequently referred, and I held responsible, as if I was the sole author of that measure.
I have a great deal to say on the different effects which follow from a taxation to support expenditure and a taxation to pay the interest of debt, but on which I cannot now write. I hope after this explanation you will relinquish the idea that there is very little in common between your opinions and mine. I shall be always at my post advocating the good cause, which I never have nor never will compromise—it has always appeared to me that the generality of people very much undervalue the resources of a great nation: if the language of the opposition in the house of Commons be sincere they undervalue them, and I think they do no good by making the picture more dismal than the reality
Ever My dear Sir Truly Yrs.
David Ricardo
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