545.: malthus to ricardo1[Reply to 542.—Answered by 550] - 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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malthus to ricardo
[Reply to 542.—Answered by 550]
E I Coll August 25th 1823
My dear Ricardo,
I am very much obliged to you for giving me your whole view on the subject of value by sending me your letter to M’Culloch. I am a good deal engaged just at this moment, or should have answered your previous letter, but I cannot return your letter to M’Culloch which I have read with great attention without a few words on its contents. I most fully agree with you in your remarks on his view of the subject. It does certainly appear to be a most unjustifiable and useless mode of applying the term, labour worked up in a commodity to the increase of value occasioned by the time it is necessary to keep it before it is brought to market; but I see no impropriety in saying with Adam Smith and myself that labour will measure not only that part of the whole value of the commodity which resolves itself into labour, but also that which resolves itself into profits. I of course quite agree with you in saying that the great mass of commodities is not produced by labour alone, but by the union of labour and capital; and consequently if I thought that my measure would not measure the profits of capital I would give it up without a moments hesitation; but it appears to me after the maturest consideration of all the objections which have been made to me, that it will measure both the quantity and the rate of profits accurately, and therefore will measure the value of an oak tree as well as of shrimps. You allow distinctly that my measure will measure the value of shrimps or of gold picked up on the sea shore. Now let us suppose for a moment that this gold which before was considered as being brought to market immediately must now be kept for a year before it is exchanged, and that profits were ten per cent, would not the exact difference between the value of the shrimps obtained by ten days labour and of the gold obtained by ten days, be ascertained by adding ten per cent to the labour employed upon the gold; and will not the gold in that case command 11 days labour, while the shrimps command ten, that is, will not the relative quantities of labour which they will command exactly measure the amount of the additional value given to the gold by the element of profits. Moreover if the natural and absolute condition of the supply of the shrimps were the employment of ten days labour, is it not correct to say that the natural and absolute value of the shrimps is measured by ten days labour; and in the same manner, as the gold in the case supposed could not be supplied without the addition of a value of ten per cent to the value of the labour employed, must it not be equally correct to say that the natural and absolute value of the gold in this case is measured by the eleven days labour. Apply this principle to the case of the cloth and wine which you have mentioned in the latter part of your letter, or to the case of the oak tree, and you will find it answer in every instance, whatever may be the variations of profits, or the length of time required to bring the commodity to market, while in all these cases of great variations or great length of time, your measure according to your own concessions would be greatly inaccurate.
You very justly say that as soon as we are in possession of the knowledge of the circumstances which determine the value of commodities we are enabled to say what is necessary to give us an invariable measure of value. Now what can determine the natural and absolute value of commodities, but the natural and absolute conditions of their supply. Neither the advance of a certain quantity of corn nor even of a certain quantity of money will secure this supply unless they will command the requisite quantity of labour. Labour is the real advance in kind and the profits may be correctly estimated upon the advances whatever they may be. Consequently it appears to me that the circumstances which determine the natural value of commodities must be the quantity of labour advanced, accumulated and immediate, with the profits upon such labour for the time that it has been employed; and if the quantity of labour so obtained be on an average the same as the quantity of labour which they will command, we are at once furnished with a ready measure of the circumstances which determine the value of commodities, or in other words an invariable measure of their value.
I cannot in the least degree enter into your view of the subject when you intimate, both in your letter to me and M’Culloch, that if my measure is a good measure for yours, yours must necessarily be as good a measure for mine. This appears to me the same thing as saying that if a foot will measure the variable height of a man, the variable height of a man will measure a foot. I say that my measure of a days labour, will measure the value of the variable quantity and value of cloth produced by a certain manufactory in a day; but surely the variable value of cloth will not measure the days labour. Supposing my measure to be invariable and yours not, mine would measure the variations of yours. Supposing your measure to be invariable, and mine not, yours would measure the variations of mine, but it is absolutely impossible that a variable measure can measure an invariable one. Thinking my measure an invariable one, I am [of] opinion that it will shew the variations of yours occasioned by the varying rate of profits, and that when you suppose the value of labour to rise, it is really only a fall in the value of money; because when we refer to the circumstances which determine the value of commodities, we shall find that money must have fallen in value, on account of the profits required to produce it having fallen, while the labour has remained the same. When you say that the value of wages necessarily rises as poorer land is taken into cultivation, you consider the value of wages as if it were composed of the element of labour alone, and not of labour and profits.
I am interrupted and can say no more without losing the post.
Ever truly Yours
T RobT Malthus.