541.: mcculloch to ricardo1[Reply to 530 & 538.—Answered by 543 & 544] - 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.
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mcculloch to ricardo
[Reply to 530 & 538.—Answered by 543 & 544]
Edinburgh 11th Augt 1823
My Dear Sir
I am greatly obliged to you for the paper containing an account of the E.I. Cos sales of tea; and for the communication of Mr Malthus letter to you and your answer—I enclose the former but I have used your permission to retain the latter for a few days that I may the better profit by what appears to me to be one of the most acute and able articles that has ever come from your pen—It ought to convince Mr Malthus though I suppose it will not.
After I came home Jeffrey pressed me to write an article on the Navigation laws, and I have since been so incessantly occupied with Taxation, that I have never been able to resume the consideration of the grand subject of value. Still, however, were it not for the doubts which you entertain I should myself have none respecting the proposition that it is by the quantity of labour only that all exchangeable value is to be estimated. I do not exclude all reference to time; but I refer to it only in order to assist me in discovering the quantities of labour which have been actually expended on or are worked up in the commodities whose value is to be measured. I need not say to you that time of itself produces no effect whatever; it only affords space for really efficient agents to produce effects. But whether these agents be men, or the processes which nature herself carries on in the production of commodities seems to me to be wholly immaterial provided it require equal capitals to set them inmotion. If you give men wages, they only give you back an equivalent for these wages, and for the period of their advance, just as natural agents do when you employ them:—that is, to give an example, when you give them a fluid, or a capital in the shape of a fluid, to turn it into wine. There is no more to be taken into account in the one case than in the other. In both cases you employ certain capitals, that is certain quantities of labour to produce certain effects; and if the capitals be equal and the times in which the effects have been produced be different, it is at once a proof that more labour has been required to produce the one effect than the other, and an exponent of that greater quantity. The circumstance of workmen being independent would not affect this result. They can only be regarded as machines worth a certain quantity of capital or labour; and their produce is to be valued by the quantity of that labour expended on it. I may be deluding and deceiving myself; but I confess I can discover no fallacy in this reasoning. If it requires a capital of £1000 to set the muscles of the masons in motion who build me a house; and if it also requires £1000 to set fermentation, purification, and all the other processes in motion which produce me a cask of wine, is it not plain that both the house and the wine cost the same quantity of labour if they are produced in the same time? and is it not also plain that if it requires different times to produce them it can only be because different quantities of labour are wrought up in them? The truth is that natural agents are quite as expensive as men. To get any thing possessed of value from them you must always give them capital or accumulated labour to work upon; and to get anything valuable from labourers you must do just the same thing.
I can see no difficulty in the case of the tree. Suppose that a machine which cost only 2/had been invented 100 years ago; that this machine was indestructible and cost no repairs, and that it had been all the while employed in the production of a commodity which was only finished today. This commodity might perhaps be worth £100 or £200; but whatever value it may be possessed of, it must have derived it entirely from the continued agency of the machine, or from the quantity of labour expended in its production. Now this is just the case of the tree. The capital employed in its production was small; but the length of time that this capital has been employed has rendered its produce the result of a great quantity of labour, and has, therefore, made it highly valuable.
There is a radical and essential difference between the circumstances which determine the exchangeable value of commodities, and a measure of that value, which I am afraid is not always kept sufficiently in view. If you are to measure value, you must measure it by the agency of some one commodity or other possessed of value, and not as Mr Malthus proposes by referring to the agent employed to give value; and as the circumstances under which every commodity is produced must always be liable to vary none can be an invariable measure, though some are certainly much less variable than others and may, therefore, be used as approximations. It is evident I think that there neither is nor can be any real and invariable standard of value; and if so it must be very idle to seek for that which can never be found. The real inquiry is to ascertain what are the circumstances which determine the exchangeable value of commodities at any given period—and these I think are all clearly reducible to one—the comparative quantities of labour bestowed on their production. If we establish this proposition we shall make the subject as plain as it ever can be made, and will at once put to rest the objections of Malthus, Torrens and so forth; but if we fail in this the subject will always be encumbered with difficulties. Whenever I have time I shall apply myself to the consideration of this subject; and I am fully satisfied that it must be my own fault if I do not make it clear that precisely the same quantities of labour have been expended on one thousand pounds worth of wine, cloth, and timber.
I am extremely glad to learn that you have written your Essay on a National Bank, and I shall be most anxious to see it. I will use the liberty to send you the proofs of the more difficult parts of my article on Taxation—they will recal Kensington garden to your recollection.
The paper you sent me from Mr Tooke is completely conclusive on the subject of Mr Blake’s pamphlet; it shews him to be equally at variance with fact as with principle. Accept my grateful thanks for all your kindness; and with kindest regards to Mrs and Miss Ricardo believe me to be with the greatest respect and esteem
Ever faithfully yours
J. R. McCulloch