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529.: ricardo to malthus1 - David Ricardo, The Works and Correspondence of David Ricardo, Vol. 9 Letters 1821-1823 [1821]

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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. 9 Letters 1821-1823.

Part of: The Works and Correspondence of David Ricardo, 11 vols (Sraffa ed.)

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529.

ricardo to malthus1

London 28 May 1823

My Dear Malthus

I will, to the best of my power, state my objections to your arguments respecting the measure of value. You have yourself stated, as an objection to my views on this subject, that a commodity produced with labour and capital united, cannot be a measure of value for any other commodities than such as are produced precisely under the same circumstances, and in this I have agreed that you are substantially correct. If all commodities were produced in one day, and by labour only, without the assistance of capital, they would vary in proportion as the quantity of labour employed on their production increased or diminished. If the same quantity of labour was constantly employed on the production of money, money would be an accurate measure of absolute value, and if shrimps, or nuts, or any other thing rose or fell in such money, it would only be because more or less labour was employed in procuring them. Under such circumstances every commodity which was the produce of a day’s labour would naturally command a day’s labour, and therefore the value of a commodity would be in proportion to the quantity of labour which it would command. But though such a money would measure accurately the value of every commodity produced under circumstances exactly similar, it would not be an accurate measure of the value of other commodities produced1 with a large quantity of capital, employed for a length of time. In the case just supposed a quantity of shrimps, would be as accurate a measure of value, as a quantity of money produced by the same quantity of labour, but when capital is employed, and cloth is the product of labour and capital, you justly say, that cloth is not a correct measure of the value of shrimps and of silver, picked up by labour alone, on the sea shore, and yet, with singular inconsistency, as I cannot help thinking, you contend that the shrimps and the silver, picked up by labour alone on the sea shore, are accurate measures of the value of cloth. If you are right, then must cloth be also an accurate measure of value, because the thing measured must be as good a measure as the thing with which you measure. When I say that £4 and a quarter of wheat are of the same value, I can measure other values by the quarter of wheat as well as by the £4. – You say “It is conceded that when labor alone is concerned in the production of commodities, and there is no question of time, both the absolute and exchangeable values of such commodities may be accurately measured by the quantity of labour employed upon them”2 Nothing can I think be more correct, and it is perfectly accordant with what I have been saying. Your mistake appears to me to be this, you shew us that under certain conditions a certain commodity would be a measure of absolute value, and then you apply it to cases where the conditions are not complied with, and suppose it to be a measure of absolute value in those cases also. You appear to me too to deceive yourself when you think you prove your proposition, because your proof only amounts to this, that your measure is a good measure of exchangeable value, but not of absolute value. You say. “If the accumulated and immediate labour worked up in a commodity be of any assumed value, £100, for instance, and the profits of the value of £20, including the compound profits upon the labour worked up in the materials, the whole will be of the value of £120. Of this value ⅙ only belongs to profits, the rest or ⅚ may be considered as the product of pure labour.” This is quite true, whether we value the commodity by the quantity of labour actually employed upon it, by the quantity which it will command when brought to market, or by the quantity of money, or any other commodity, for which it is exchanged, ⅚, in all cases, will belong to the workmen, and ⅙ to the master. “Consequently the value of of ⅚ the produce is determined by the quantity of labour employed on the whole; and the value of the whole produce by the quantity of labour employed upon it, with the addition of ⅙ of that quantity.” This is really saying no more than that when profits are one sixth of the value of the whole commodity (in which no rent enters) the other ⅚ go to reward the labourers, and that the portion so going to the labourers may itself be resolved into labour and profits in the same proportions of 5 and 1. Five men produce 6 pieces of cloth of which 5 are paid to them, the men; if profits fall one half the men will receive 5½ pieces, and then you say the cloth is of less value; but in what medium? in labour you answer. You appear to me to advance a proposition that cloth is of less value when it will exchange for less labour, and to prove it by shewing the fact, merely, that it actually does exchange for less labour.

You say “But when labour is concerned, it follows from what has been conceded, that the value of the produce is determined by the quantity of labour employed upon it.” By value here you mean absolute value, and then you immediately apply this measure of absolute value, which is only conceded in a particular case, to a general proposition, and say “consequently” consequently on what? on this particular case; “consequently the value of ⅚ of the produce is determined by the quantity of labour employed on the whole” that is to say “consequently the quantity of labour which ⅚ of the produce will command is determined by the quantity of labour employed on the whole” the same is true, in the same sense, of ⅚, , ⅝, , or of any other proportions in which the whole may be divided. My only object has been to shew, and if I am not mistaken I have succeeded in shewing, that a measure of value which is only allowed to be accurate in a particular case where no capital is employed, is arbitrarily applied by you to cases where capital and time necessarily enter into the consideration.—

I fear I have been guilty of many repetitions. I shall not regret it however if I have made myself understood.

[The remainder is wanting.]

[1 ]MS (in Ricardo’s hand) at Albury.—Letters to Malthus, LXXXIV.

[1 ]‘either’ is del. here.

[2 ]This and the following quotations are from a missing letter of Malthus.