Front Page Titles (by Subject) 500.: ricardo to [cowell]1 - The Works and Correspondence of David Ricardo, Vol. 9 Letters 1821-1823
The Online Library of Liberty
A project of Liberty Fund, Inc.
Search this Title:
500.: ricardo to [cowell]1 - David Ricardo, The Works and Correspondence of David Ricardo, Vol. 9 Letters 1821-1823 
The Works and Correspondence of David Ricardo, ed. Piero Sraffa with the Collaboration of M.H. Dobb (Indianapolis: Liberty Fund, 2005). Vol. 9 Letters 1821-1823.
About Liberty Fund:
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.
Fair use statement:
ricardo to [cowell]1
My Dear Sir
I have read Mr. Cowell’s2 paper with attention. It is ingenuous, but I think his remedy for Agricultural distress would not be so efficacious as he appears to imagine. He admits that the distress is not caused by taxation, but by a too abundant supply of produce, and he would relieve the farmer by diminishing the cost of production; which he undoubtedly would do, by reducing those taxes which affect him as a producer. But what taxes do affect him as a producer? Tithes and Poor rates. Is it practicable to relieve him from these? I think not, but suppose it was, would not corn sink to a lower price in consequence of a remission of these taxes? What prevents a farmer or corn dealer from selling his corn below present prices? The certainty that present prices cannot compensate the future grower for the cost of production. He holds his corn with some confidence whilst he is assured that no corn can come into the market below a certain cost and remunerate the grower, but if the taxes were remitted on future production, the competition against him would be more alarming to his mind and I cannot have the least doubt he would be inclined to sell at a lower price. If the low price be caused by abundance there can be no remedy for it but increased demand or diminished supply. The farmer has a right to expect a diminished supply while the market price continues below the natural price, but reduce the future natural price by taking taxes off from the production of corn, and you encourage rather than discourage an abundant supply. Suppose 70/- pr. qr. to be the remunerating price, you would hold your wheat with confidence at the present price of 50/-, but reduce the remunerating price to 50/- and you would be less disposed to keep your corn out of the market. If I should be wrong in this view I ask what effect have these taxes on the price of corn? probably about 7/- pr. qr. and therefore this species of relief could not exceed that amount.
I may be told that there are other taxes from the repeal of which the farmer would get relief; I answer, there are, and by the repeal of such taxes, he as well as every other consumer would be relieved. The less he pays to the state the more he would have for himself, and the better could he meet his difficulties. To relieve him from such taxes would afford no inducement to produce more corn, because it would not make the production of corn relatively cheaper than the production of any other commodity. This is the essential difference between taking taxes off that affect the producer, and taking those off which affect consumers generally. In the first case you diminish the cost of production of one commodity relatively to the cost of all others; in the second case you leave them all in the same relation to each other.
I fear I have very imperfectly explained myself but I am so much engaged that I cannot even attempt to do it better. It is possible that I may have a bias on this subject—I am not however conscious of it.
Yours very truly
Tuesday eveng. 21 May 1 Upper Brook Street
[1 ]The MS was purchased by Messrs Maggs at Sotheby’s sale of 28 April 1937, lot 647, described as ‘The property of Mrs Herbert W. Verner’. The same property included letters from Byron to Master J. Cowell, at Eton College, and to Mr and Mrs Cowell, 1812–13.
[2 ]Presumably John Cowell, sen., father of the preceding.
[1 ]Omitted in MS. Paper watermarked ‘1821’; 21 May was a Tuesday in 1822.