Chapter VI: Part 6

I hope your additional volume will soon follow your new edition of the old work[138]. I shall be glad to see in a connected form your matured opinions on the progress of rent, profits, and wages, and in what manner they are affected by the increasing difficulty of procuring food, by the increase of capital, and the improvement of machinery. I fear we shall not agree on these subjects, and I should be very glad if we could fairly submit our different views to the public, that we might have some able heads engaged in considering it [_sic_][139]. Of this, however, I have little hope, for though I feel strongly the truth of my theory I cannot succeed in stating it clearly. I have been very much impeded by the question of price and value, my former ideas on those points not being correct. My present view may be equally faulty, for it leads to conclusions at variance with all my preconceived opinions. I shall continue to work, if only for my own satisfaction, till I have given my theory a consistent form.

You say that you think I have sometimes conceded that if population were miraculously stopped, while the most fertile land remained uncultivated, profits would fall upon the supposition of an increase of capital still going on. I concede it now. Profits I think depend on wages,--wages depend on demand and supply of labour, and on the cost of the necessaries on which wages are expended. These two causes may be operating on profits at the same time, either in the same, or in an opposite direction. In the case you put wages would have a tendency to keep stationary as far as the supply of food was concerned, but they would have a tendency to rise in consequence of the demand for labour increasing, whilst the supply continued the same. Under such circumstances profits would of course fall. You must, however, allow that this is an extraordinary case, and out of the common course of events, for the tendency of the population to increase is, in our state of society, more than equal to that of the capital to increase. I shall be in London on Thursday or Friday next.... I should be glad if some fortunate accident were to take you to town at the same time. If so let me know where you are to be found; a line directed to the Stock Exchange will be certain to find me. We shall not finally leave the country till January or February. I wish you would come and see a little more of Gatcomb during your Xmas vacation....

Ever truly yours,
DAVID RICARDO.

L.

BOW, MIDDLESEX, _11 Oct., 1816_.

MY DEAR SIR,

I arrived in London this morning and found your kind letter, which I ought to have answered immediately, as you could not otherwise know whether I accepted your kind invitation, before the time that you might expect me. The truth is I forgot the day of the week, and was not aware till I got home that we were so near Saturday. I very much regret that I shall not be able to avail myself of Mrs. Malthus' and your kindness, as I have engagements here which will prevent me from leaving town till I return to Gatcomb.

You mistake me if you suppose me to say that under no circumstances of facility of production profits could fall. What I say is that profits will rise when wages fall, and, as one of the main causes of the fall of wages is cheap food and necessaries, it is _probable_ that with facility of production, or cheap food and necessaries, profits would rise. At the very time that the labour of a certain number of men may produce on such land as pays no rent 1100 instead of 1000 quarters of corn, and when corn falls in consequence from L5 to L4 10_s._ per quarter, the money as well as the corn wages of labour _may_ rise, for capital _may_ have increased at a very rapid rate, and labourers at a slow rate, in which case profits would fall and not rise. Under these very peculiar circumstances of higher money wages with a lower price of necessaries, the wages of labour would be in an unusual state, and would shortly revert to the old standard, when profits would feel the benefit. All I mean to contend for is that profits depend on wages, wages under common circumstances on the price of food and necessaries, and the price of food and necessaries on the fertility of the last cultivated land. In all cases it is perhaps true that rent will depend upon the demand compared with the supply of good land, and wages on the demand compared with the supply of labour, if it be allowed that the price of necessaries influence[s] the demand and supply of labour.

I do not quite understand the expression that profits depend on the demand compared with the supply of capital. What would you say of two countries in [which] there are precisely equal capitals, where wages [are] also equal, and where the population is precisely in the same number. Would the demand compared with the supply of capital be the same in both? If you say they would, I ask whether their rate of profits would be the same under any other supposition but that of their land being exactly of the same degree of fertility? To me it appears quite probable that the ordinary and usual rate of profits might in one be 20 and in the other only 15 per cent., or in any other proportions....

Believe me,
Ever yours,
DAVID RICARDO.

LI.

LONDON, _14th Oct., 1816_.

MY DEAR SIR,

My stay in London will not be prolonged beyond Friday next. I hope it will be convenient to you to come up before. On Thursday I shall be disengaged and will meet you at any place in London that may best suit you, unless you will dine with me at my brother's at Bow. His house is small, and I fear he has not, now we are with him, a spare bed to offer, and you may not like to travel so far at night. If so, let us meet in the city and get our dinner there.

The money wages of labour are, I apprehend, generally regulated by facility of production. With an abundant production too I think that a less proportion of the whole will be given to the landlords, and more will remain for the other two classes, of capitalists and labourers; but of this increased quantity a greater proportion will be given to capitalists and a less proportion to labourers. Now, though what you call the real wages of labour[140] (but which I think a wrong term) will increase, the money wages will fall. But this will not be the case with profits; what you would call real profits would increase, but so would also money profits. Under the circumstances then that I have supposed, the rate of profits would rise though money wages would fall. The difference between us is this. I say that with every facility or difficulty of production, of the quantity of necessaries, that is to be divided between profits and wages, different proportions will be given to each, and that money will accurately show those proportions. You appear to me to think that profits do not depend on the division of the produce, and that money wages may as often rise with facility of production as fall.

You state the real question fairly; it is, 'What is the main cause which determines the rate of profits under all the varying degrees of productiveness?' You do not appear to me [to] solve the question when you answer 'that it is the proportion which capital bears to labour.' In a rich country where profits are low, and where a great portion of produce is paid to the landlords for rent, the proportion of labour to capital will be the greatest, and yet according to your theory it should be the least. You will not, I think, deny that in a country where labour is high a manufacturer would employ more capital to produce the same commodities than what he would do in a country where wages were low, and there also would profits be low; that is to say, profits are high where capital bears a large proportion to labour, and low where labour bears a large proportion to capital.

I am writing amidst the noise of the Stock Exchange, and very much fear that I shall be more than usually incomprehensible.

Ever yours,
DAVID RICARDO.

LII.

GATCOMB PARK, _3rd Jan., 1817_.

MY DEAR SIR,

A long time has elapsed since I had the pleasure of seeing you, during which time I have often intended writing, as I did not hear from you; but my natural indolence prevailed, and I have procrastinated it till now. I had some faint hopes that you might be in the neighbouring county this vacation, in which case I should have hoped to prevail on you to pass a short time here; but I learnt from Mr. Binda, who is on a visit to Mr. Smith, that he had met with you at Holland House, and that it was not probable you would go far from home. I had previously enquired about you of our young neighbour George Clerk; he, however, could only tell me you were well; he knew nothing about your intended movements.

By an advertisement in the public papers I perceive that you have been occupied in writing about your College[141], which I regret, as I believe the task was not very agreeable to you, and as it may have prevented you from proceeding with other works in which I imagine you are more interested. I should be glad to hear that everything you think defective in the College was remedied, and that it was placed on such a footing as to require only the ordinary routine of your attention.

I have been occasionally employed, since we met, in putting my thoughts on paper, on the subjects which have often passed under our discussion. I have encountered the usual obstacles from difficulties of composition; but I have resolutely persevered till I have committed everything to paper that was floating in my mind. There are a few points on which there is a shadow of difference between my present and my past opinions; but they are not those on which we could not agree. I hope I shall succeed in putting my MS. in some tolerable order, as on that will depend whether I shall again appear before the public. What I have hitherto done is rather a statement of my own opinions than an attempt at the refutation of the opinions of others. Lately, however, I have been looking over Adam Smith, Say, and Buchanan, and where I have seen passages in their works contrary to the principles I hold to be correct I have noticed them, and shall perhaps make them the subject of some comment.

I fear I shall not have the satisfaction of receiving your acquiescence to my doctrines, particularly as I have reverted to my former views respecting taxes on raw produce. Whatever may be correct on that subject, surely Adam Smith is wrong, as there are various passages in his book inconsistent with each other.

We shall, I hope, soon meet and renew our discussions on some of these difficult matters. I shall be in London on Friday next, and hope to see you in Brook Street as our inmate, as soon after that day as business or inclination may draw you to London.

I want to hear your opinion of the measures lately adopted for the relief of the poor[142]. I am not one of those who think that the raising of funds for the purpose of employing the poor is a very efficacious mode of relief, as it diverts those funds from other employments which would be equally if not more productive to the community. That part of the capital which employs the poor on the roads, for example, cannot fail to employ men somewhere, and I believe every interference is prejudicial....

Believe me,
Ever yours,
DAVID RICARDO.

LIII.

UPPER BROOK STREET, LONDON, _24 Jan., 1817_.

MY DEAR SIR,

I have read your pamphlet[143] with great pleasure, and am very much satisfied with your arguments in favour of a college in preference to a school for the education of the young men destined to manage the complicated affairs of our Indian Empire. The testimonies from India in favour of the young men sent from the College, as compared with those who went out to India before the establishment of the College make powerfully for you, and do not appear to have been answered by your opponents. I observe by the papers that the discussion on this subject will be renewed at the India House on the 6th February, at which time I conclude that you will be in London. If so, I hope you will make my house your headquarters. Mr. Murray promised to send copies of your book to the gentlemen you directed me to mention to him.

It appears to me that one great cause of our difference in opinion on the subjects which we have so often discussed is that you have always in your mind the immediate and temporary effects of particular changes, whereas I put these immediate and temporary effects quite aside, and fix my whole attention on the permanent state of things which will result from them. Perhaps you estimate these temporary effects too highly, whilst I am too much disposed to undervalue them. To manage the subject quite right, they should be carefully distinguished and mentioned, and the due effects ascribed to each.

I have been reading again your three last pamphlets on rent and corn, and cannot help thinking there is some ambiguity in the language. The word [_sic_], 'high price of raw produce,' is calculated to produce a different impression on your reader from what you mean. Your first and third causes of high price appear to me to be directly at variance with each other. The first is the fertility of land, the third the scarcity of fertile land. The second cause too, I think, never operates[144]. There is one passage in particular which expresses fully my opinions. I have not the book by me, and cannot refer you to the page, but it begins, 'I have no hesitation in stating that independently of irregularities in the currency,' etc. It is in the essay on Rent[145].

Surely Buchanan is right and your comment[146] wrong; rent is not a creation but a transfer of wealth. It is the necessary consequence of rent being the effect and not the cause of high price[147].

Say and I would say that by turning revenue into capital we shall obtain both an increased supply and an increased demand; but, if the same capital be so created, I do not approve of its present application, and taking it out of the hands of those who know best how to employ it, to encourage industry of a different kind and under the superintendence of those who know nothing of the wants and demands of mankind, and blindly produce cloth or stockings of which we have already too much, or improve roads which nobody wishes to travel....

Very truly yours,
DAVID RICARDO.

LIV.

MY DEAR SIR,

I am not in the least acquainted with the subject on which your papers[148] treat, but that is no reason why I should not mention what appears to me defective. In page 8[149] you add 1/6 to the births for probable omissions, and 1/12 for deaths; but you do not tell your reader why these proportions are taken rather than 1/4 or 1/3, nor can I discover on what grounds those numbers are chosen.

You sometimes take averages from the known facts of certain years; but your averages are formed on an arithmetical ratio while your application is to a geometrical series. I submit whether this is correct.

If, as you say in page 14[150], births are to burials as 47 to 30, and the mortality as 1 to 47, the addition to the population would be little more than 1/82 instead of 1/83, for out of every 1410 persons 30 would die and 47 would be born, and consequently there would be an increase of 17; but 1410 divided by 17 is 82.94, or 83 nearly; and therefore, if 1410 gives an increase of 17, 9,287,000 will give an increase of 111,970, or 1,119,700 in ten years, which will raise the population 9,287,000 + 1,119,700 = 10,406,700 instead of 10,483,000[151].

In page 16[152] the mortality is supposed to be as before, 1 in 47, and the births to the population as 1 to 29-1/2, and the population to be 9,287,000. This latter sum divided by 29-1/2 gives 314,813 the annual number of births, and divided by 47 gives 197,595 the annual number of deaths; deduct one from the other (197,595 from 314,813) gives 117,218 for the annual increase, which in ten years would be 1,172,180, which added to the former population of 9,287,000 gives 10,459,180 instead of 10,531,000.

I have marked in pages 35 and 36 some very trifling errors. These are all I can discover with the facts which are before me.

Ever truly yours,
DAVID RICARDO.

_8 Feb., 1817._

LV.

LONDON, _21 Feb., 1817_.

MY DEAR SIR,

I am very sorry that you were prevented from being in London yesterday. I fully expected to see you, as I thought the subject of debate at the India House was of too much interest not to make you desirous of hearing it.

Mr. Grant[153] was, I assure you, a warm advocate in the cause of the College. He spake admirably and with great effect, improving in energy and eloquence as he proceeded. He did justice to the various qualifications of the professors for the responsible situations which they filled, and I believe left nothing unsaid which might assist the cause which he so ably defended. I thought him very severe on Randle Jackson, who will find it difficult to answer some parts of his speech. In the Times the report of what he said is very correct, as far as it goes; but it is necessarily a very abbreviated statement. Mr. Kinnaird[154] began by speaking in the most respectful manner of you, and indeed in terms of great eulogy, but afterwards I think absurdly dwelt on your being an interested party and an advocate for the college, and imitated Mr. Jackson in his irony on those whom he first declared were highly deserving of respect. In what manner could we have any correct account of the college and its concerns but from an interested party? Who could speak of its management, attainments, and discipline, but those who were acquainted with it? He, however, gave up the only strong grounds they had (if they had been true) for inquiring into the affairs of the college, for he said that he had no idea that there was more immorality and profligacy in the East India College than in any other seminary; neither did he say anything of a want of proficiency in the students; but his main argument was built on the general principle that a supply of intellectual attainments will as surely follow an effectual demand for it, as the supply of any material commodity will follow effectual demand.

Mr. Grant, I should mention, supported a directly contrary principle. Mr. Kinnaird dwelt very much on the compulsion under which parents were of sending their children to this particular institution. He seemed to me to adopt Mr. Mill's view of the subject, and his argument would have been quite as applicable to all colleges if parents were compelled to send their children to them. He passed over the compulsion under which parents were to send their children to college, who wished to bring them up to the church, etc. In a few minutes' conversation which I had with him after the debate I urged this objection, and he answered that they had a choice among a large number of colleges, whereas in your case they were confined to this one.

He finished by assuring me that my friend had a bad cause, that it could not be defended and must fall. Mr. Impey's speech was badly timed; he should not have immediately followed Mr. Grant, for he could not then say anything new, nor could he repeat anything that had been said half as well as Mr. Grant had said it before. The debate will be renewed on Tuesday. If you should come up, I shall expect you in Brook Street. If I do not see you, and you are disengaged on the Saturday evening following, I shall be glad to pass a day with you, commencing my visit at that time....

Very truly yours,
DAVID RICARDO.

LVI.

LONDON, _9th March, 1817_.

MY DEAR SIR,

I leave London to-morrow morning very early for Gloucestershire, from whence I shall return some time before your next meeting at the King of Clubs, so that I hope you will do me the favour to come to Brook Street when you visit town on that occasion.

... This letter will accompany that part of my MS.[155] which refers to you. I hope I have not in any respect misapprehended you; and, however we may differ in opinion on the subjects that we have so often discussed, I trust you will not think that I have exceeded the bounds of fair criticism in my remarks on the passages of your pamphlets which I have selected for animadversion. The printing goes on briskly. We have had a sheet a day since the commencement, and eleven sheets are now corrected. In their printed form they appear worse, in my eyes, than before; and I need all the encouragement of my partial correctors[156] to keep alive a spark of hope respecting their reception. I wish it were fairly out of my hands; and, that it may not be delayed, I have taken every precaution that it shall proceed uninterruptedly in my absence. As yet I have no misgivings about the doctrines themselves; all my fears are for the language and arrangement, and above all that I may not have succeeded in clearly showing what the opinions are which I am desirous of submitting to fair investigation.

I hope that college affairs will no longer occupy an undue proportion of your attention, but that you will be able to give a finishing hand to the works which you are about to publish. Mrs. Marcet[157] will immediately publish a second edition[158]. I have given her my opinion on some passages of her book, and have pointed out those which I know you would dispute with me. If she begins to listen to our controversy, the printing of her book will be long delayed; she had better avoid it, and keep her course on neutral ground. I believe we should sadly puzzle Miss Caroline, and I doubt whether Mrs. B. herself could clear up the difficulty.

From some conversation which I had yesterday morning with Mr. Murray, it appears that Torrens has been offering his book to him; but Murray is very lukewarm in the negotiation, and really very much underrates Torrens' talents. He thinks that the sale of Torrens' best work, that on corn[159], was very limited; he talked of it's not having exceeded 150 copies. Since writing the above I have seen Mr. Hume[160]; he tells me that he has heard that the directors are about to institute an inquiry into the state of the college themselves....

Very truly yours,
DAVID RICARDO.

LVII.

LONDON, _22 March, 1817_.

MY DEAR SIR,

I have been expecting you, both yesterday and to-day, and it is only after a most laborious calculation that I am led to suspect that the meeting of your Club is not till next Saturday. Next Friday then, or any earlier day, I hope we shall see you in Brook Street; and I am desired by Mrs. Ricardo to say that, if Mrs. Malthus will also favour us with her company, she will be very happy to see her. If you should come on or before Friday, the printer will not before that day want that part of my MS. which I sent to you; but, if he uses due diligence, he will certainly be ready for it about that time. If you have any remarks to make on it which will require much consideration on my part, be so good as to send it me before, for, as the time approaches that I am to appear in print, I seem to become more dissatisfied with my work, and less capable to give any proposition contained in it a patient investigation.

It is now 5 o'clock; and, notwithstanding my doubts have been gathering strength since the morning, I am but just convinced, after tracing back with Mr. Hitchings the day you were last here, that I shall not see you this day.

In great haste, yours very truly,

DAVID RICARDO.

We returned from Gloucestershire on Tuesday last.

LVIII.

LONDON, _26 March, 1817_.

MY DEAR SIR,

This morning I intended that my letter to you to-day should inform you that I would have the pleasure of passing next Saturday and Sunday with you at Haileybury; but a circumstance has taken place which will make it necessary for me to go to Bath on Friday next, from which place I shall again return to London early in the next week. As you say you will not be in town till after Easter, perhaps it will be convenient to you to see me at Haileybury on Saturday se'nnight. If so, I shall be with you on that day, at your dinner hour; and, if I do not hear from you before, I shall conclude that you have no engagement which will render my visit inconvenient.

I mean this day to put the last of my papers in the printer's hands, and hope he will be able to finish the printing before my visit to you; but of this I have some doubt, as he does not proceed regularly at the same even pace.

I agree with you that, after having so often heard your opinions, in contradiction to mine, it would not be of much use just now, when my book is actually in the press, to enter again on your reasons for differing with me. I did not send you the manuscripts with any such intention. I merely wished you to see that part which related to you before I published, that I might not inadvertently misrepresent your statement. I cannot have the least objection to insert the note you mention[161], although I cannot but regret that we should differ so much as to the just and fair import of the words _real price_. When you see my book altogether, you will not perhaps differ from me so much as you now think you do. You may, and I believe will, object to the correctness of many of my terms, as they will appear to you fanciful and not always properly applied; but, making allowance for such deviations, you will I am sure agree with much of the matter. On some points, indeed, there is no difference between us, and on others our chief disagreement would be in the mode of representing them. I have written this letter at intervals between other engagements, as I have been repeatedly interrupted. I now hear the postman's bell, and must hasten to conclude.

Very truly yours,
DAVID RICARDO.

LIX.

MY DEAR SIR,

I came up to London last night by the mail from Salisbury, and have just seen your letter. Mr. Whishaw told me when we last met that he was going to your house on Saturday, and I feared that my projected visit might, on account of numbers, be inconvenient to you.... You have, however, suggested the getting me a bed out of your house, with which I shall be well satisfied, let it be hard or soft, narrow or roomy.... Pray make no ceremony with me, and do not receive me if there be the least difficulty about the bed.

Yours very truly,
DAVID RICARDO.

LONDON, _3 June, 1817_.

LX.

LONDON, _25 July, 1817_.

MY DEAR SIR,

I am just returned from my six weeks' excursion highly pleased with everything I have seen. I very much regretted that you were not with me, as I am sure you would have been gratified with the towns of Flanders and the scenery of Namur, the Rhine and the castle of Heidelberg. I met Mr. Hamilton[162] at Luneville; he was going through the country that I had just quitted, and I hope he was as much pleased with it as I was. I fear that his engagements at the college made him devote less time to it than was required to enjoy all its beauties. We found that we were obliged to hurry over it with more expedition than we wished. Mrs. Ricardo has been at Gatcomb rather more than a week, and to-morrow I shall quit town and join her there. Since Tuesday morning when I left Paris I have been incessantly travelling in the day and have not devoted many hours to sleep. I shall not be sorry to have a few days' rest. Your college was liberal to France, for I not only met Mr. Hamilton there but Mr. Le Bas[163] and the gentleman, whose name I forget, who teaches the French language at that institution[164].

I hope you have been enjoying your excursion and that you found less distress in Ireland than has been represented as existing there. The prospect of a good harvest is some consolation for the sufferings which the poor have been forced to endure; in every country of Europe they have endured much, and in every one they are anticipating a return of plenty.

M. Say was very much gratified with your present, and requested me to forward a letter and a small duodecimo volume which he has just published[165]. The letter I send you, but the book as well as his work on Political Economy, the 3rd edition of which he gave to me, has been detained at the Custom house at Dover, that they may have sufficient time to calculate the duty on them. As I did not wish to stay at Dover till the next day, I requested the master of the Inn to pay the duty and to forward them by Osman, who will be on his return from France in a few days. The book is an interesting little work in the manner of Rochefoucauld, and appears to me to be ably done. M. Say was very agreeable and friendly; he dined with me one day and I with him another. He is engaged in a commercial concern to which I believe he gives great attention.

I fear that it will be a long time before you and I meet, though I shall probably be in London once or twice in the next three months. I hope you will be disposed to bend your stops westerly in your winter vacation, and that you will not fail to pay us a visit at Gatcomb; but not such a visit as the last,--I shall not be satisfied with a flying excursion. Perhaps Mr. Whishaw will favour me with his company at the same time; if so, with the assistance of my friend Smith, we should, I hope, contrive to make the time pass agreeably to both of you. Being very tired and very sleepy I hasten to conclude.

Very truly yours,
DAVID RICARDO.

LXI.

GATCOMB PARK, _4 Sept., 1817_.

MY DEAR SIR,

I thank you very much for your kind letter of the 17th August. I am pleased to hear that your journey to Ireland turned out so well. The account you give of the improvements before the check which they received during the last two years, as well as of the situation of the people, agrees exactly with what I should expect to find. Humbold[t] in his account of New Spain[166] points out the very same evils as you do in Ireland, proceeding too from the same cause. The land there yields a great abundance of Bananas, Manioc, Potatoes, and Wheat, with very little labour, and the people, having no taste for luxuries and having abundance of food, have the privilege of being idle. No other advantage would I think result from the disposable labour being employed in manufactures than in preventing its being turned to profligate and mischievous pursuits, dangerous to the public peace. Happiness is the object to be desired, and we cannot be quite sure that, provided he is equally well fed, a man may not be happier in the enjoyment of the luxury of idleness than in the enjoyment of the luxuries of a neat cottage and good clothes. And after all we do not know if these would fall to his share. His labour might only increase the enjoyments of his employer.

Mr. Smith has heard from Mr. Whishaw; he was at Paris when he wrote, on the eve of recommencing his journey. I hope he may enjoy his tour. It is a pity that he is without an agreeable companion; he is of so sociable a disposition that he would have had pleasure in communicating his feelings and comparing them with these of another intelligent person. Mr. Smith has also heard from Mr. Warburton, who has set out on the very same tour that I have been taking, with the addition of Holland, through which country he means to pass. He has a very intelligent companion in Dr. Woolaston[167].

At the very moment that we were beginning to despair of the weather it has changed and is now beautiful. Our hopes will I trust not be disappointed, and we shall be enabled safely to house the abundant crops with which our lands in every country (_sic_) are loaded. I doubt whether we have, even during the late distresses, ceased to advance as a nation in wealth; but at present I think no one can doubt that we are again making forward strides in prosperity. A bad harvest does not perhaps very much check the progress of wealth; but it materially interferes with the general happiness.

You flatter me very much by your second perusal of my book; and I am happy to find that there are but a very few important points on which we materially differ. I certainly allow that my theory of value does not hold good in different countries when profits are different. If you look to page 156 and the following pages you will see my ideas on that subject[168].

It is only yesterday that I received the book from Dover which M. Say entrusted me with for you; I send that and this letter together by Mrs. Ricardo, who is going to London for a few days; she has undertaken to send my parcel to the Hertford coach.

... If you go to Bath and do not come over to us I shall not know how to forgive you.

I have heard lately from Mill; he is still hard at work in correcting the press (_sic_) and finishing his book[169]. He tells me that Sir Samuel and Lady Romilly are expected at Ford Abbey. I fully expect that I shall see him here before he returns to London. I do not know when I shall be obliged to go to town, but whenever it may happen I will let you know, as I would not willingly forego any chance of meeting you. Mr. Smith's house is the centre of attraction for all his able London friends, and he is kind enough always to allow me to participate in the pleasure which their company affords him. We have already had Mr. Warburton and Mr. Belsham, and in a few days he expects to see Mr. Mallet. Mr. Smith continues to reign pre-eminent in the good-will of all his neighbours, and indeed I do not know any one who is entitled to dispute the palm with him....

Ever yours truly,
DAVID RICARDO.

This is a sad blundering letter, bad even from me, but you must excuse it, and will I am sure when I tell you that I am just recovering from the languor and weakness caused by the powerful medicines which I have been obliged to take.... The night before last I was very ill; yesterday I was better, and to-day I have no complaint left but weakness.

LXII.

GATCOMB PARK, _10 Oct., 1817_.

MY DEAR SIR,

I said I would write to you when I was going to London and therefore I now do it, but without much hope of seeing you there.... It is not my intention, if I can get my business done, to stay in town beyond Tuesday morning, unless I had any chance of meeting you there, which would induce me to defer my return home one day longer.... Dr. Roget[170] has been on a visit for a few days at Mr. Smith's; he stayed one evening with us at Gatcomb. We all very much admire his unassuming manners, and are well disposed to admit his claims on our esteem and affection. Sir Samuel Romilly and Lady Romilly have been on a visit at Mr. Phelps' a near neighbour of mine. They went from here to Bowood[171] and from thence they were going to Ford Abbey, Mr. Bentham's residence. I have since heard of their arrival there, and they are now probably returned to London.

... Our harvest in this part of the country is almost entirely got in. The crops are I believe generally good, and we are very grateful for the fortunate change in the weather which enabled us to reap and house them in a state of perfection. We shall now, I hope, for some years sail before the wind. You and I have always agreed in our opinions of the power and wealth of the country; we were not in a state of despair at the discouraging circumstances with which we were lately surrounded. We looked forward to the revival which has taken place....

Ever truly yours,
DAVID RICARDO.

If you should write me a line, it will reach me sooner by being directed to the Stock Exchange.

LXIII.

GATCOMB PARK, _21 Oct., 1817_.

MY DEAR SIR,

I hope we shall be more fortunate in meeting, when I again visit London.

You think that the low price of labour which has lately prevailed contradicts my theory of profits depending on wages, because the rate of interest is at the same time very low. If interest and profits invariably moved in the same degree and in the same direction, my theory might be plausibly opposed; but I consider this as by no means the case. Although interest is undoubtedly ultimately regulated by profits, rising when they are high and falling when they are low, yet there are considerable intervals during which a low rate of interest is compatible with a high rate of profit; and this generally occurs when capital is moving from the employments of war to those of peace. If goods do not vary in price and the cost of manufacturing them falls, it is self-evident that profits must rise; and, if goods do fall in price generally, then it is not the value of goods or of labour which falls, but the value of the medium in which they are paid which rises, and then my theory does not require any rise of profits; they may even fall.

You ask me if I can show you the fallacy of the following statement: 'Capital is wholly employed in the purchase of materials and machinery and the maintenance of labour. If, from any cause whatever, materials, machinery and the maintenance of the labourer and his wages fall considerably in money value, is it _possible_ that the same amount of monied capital can be employed in the country?' I answer that it is _possible_ but by no means probable. Suppose the mines were to produce a diminished quantity of the precious metals, at the same time that materials and machinery were greatly increased in quantity, might not the increased aggregate quantity of materials and machinery be of a greater money value than before, although each particular portion should be at a less? Might we not by importation appropriate to ourselves a larger proportion of the mass of money distributed amongst all the countries of the world? I cannot doubt the _possibility_ of the case.

In your argument about the stimulus of increased value and the effects of demand and supply on future wealth, you do not really differ from my views on this subject so much as you suppose, for I make profits and wealth to depend on the real cheapness of labour, and so do you, for you say that the evils of a dearth will often be more than counteracted as regards wealth, by the great stimulus which it may give to industry. I say the same, for I contend that the evils of a dearth fall exclusively on the labouring classes, that they perform frequently more labour not only without receiving the same allowance of food and necessaries, but often without receiving the same value for wages or the same recompense in money, whilst everything is dearer. When this happens, profits, which always depend on the value of labour, must necessarily rise.

I thought I had written to you about the additional matter in your excellent work[172], although I had not given it all the examination I intended. I read it as I was travelling and noticed the pages wherever I saw the shadow of a difference between us, that I might look at the passages again when I got home and give them my best consideration[A][173]. On my passing through London when I returned from France, I looked for your book, as I expected you had sent me a copy, which I think you kindly told me you would do; but Mrs. Ricardo had jumbled that and many other books in a wardrobe, and it could not be got at till I went to town. I have it now here and have been reading all the new matter again, and am surprised at the little that I can discover, with the utmost ingenuity, to differ from.

[A] [_Foot-note, eventually ousting the text._] In every part you are exceedingly clear, and time only is wanted to carry conviction to every mind. The chief difference between us is whether food or population precedes. I could almost agree with the statement of the question in p. 47 of third vol., which I think is in strict conformity with Sir J. Steuart's opinion. In speaking of the fall of wages you only once mention _corn_ wages, but must always mean corn wages and not money wages. In the note to p. 438 of the third vol. you agree to my doctrine, but I think in pp. 446, 456 and 457 you forget the admission you had before made, 497 [_sic_]. You agree with Smith that the monopoly of the Colony trade raises profits. 502 is in my opinion wrong and inconsistent with 438. I differ a little from your views in 506. You do not always appear to me to admit that the tendency of the Poor Laws is to increase the quantity of food to be divided, but assume in some places that the same quantity is to be divided among a larger number. I can neither agree with Adam Smith nor with you in 326, 328: a maximum tends to discourage future production; an undue increase of wages, or poor laws, tend to promote it. 360, a fall in the price of commodities and a rise in the value of money are spoken of as the same thing. 361, a diminution of production is another way of expressing an abatement of demand. 371, a combination among the workmen would increase the amount of money to be divided amongst the labouring class. These you will observe are slight objections, and I make them that I may preserve my consistency. They would not be understood by the mass of readers, but to you who are acquainted with my _peculiar_ views, if you please, they need no explanation....

Ever yours,
DAVID RICARDO.

LXIV.

GATCOMB PARK, _16 Dec., 1817_.

MY DEAR SIR,

I believe I am within the time stated in your letter for your visit to Surr[e]y, and consequently that this will reach you there. I am sorry that you were not sufficiently loyal to give her majesty some mark of your attention at Bath[174], during your present vacation, as in that case I might have hoped to have seen you here. As it is we may probably be in London nearly at the same time. We have not yet absolutely fixed on the day for our journey, but it will not be deferred beyond the middle of next month. I hope I may see you before your return home.

I am glad to find that we may soon expect another volume[175] from your pen, although, if you attack me, I am prepared for nine tenths of our readers deciding in favour of your view of the question. I want an able pen on my side to put my opinions in a clear light, and to divest them of that appearance of paradox which they now wear. I wish I could assist you to a good title but no one is more able to give a work the best air and arrangement than yourself. Have you seen the Review of M. Say and myself in the British? In some of the remarks you would I believe agree; yet it is some consolation to me that, after designating every part of my performance absurd and nonsensical, they attack you on the subject of Rent, and say that both you and I have endeavoured to make the nature of rent, which was before so clear, obscure. Rent is nothing more than the hire paid for land. I feel delighted that they have given me so desirable a companion. In the Scotsman, a Scotch newspaper, I have been ably defended--the writer[176] has evidently understood what I meant to say, which the reviewer has not done.

I have been reading Mill's book[177] for this last week, and have got through about half of the first volume. I am not qualified to give an opinion of its merits, but I am very much pleased with it. It is very interesting, and is, I think, calculated to excite a great deal of attention, for it not only descants on the religion, manners, laws, arts, and literature, of the Hindus, but compares them with the religion, manners, etc. of other nations which the world has generally considered as much inferior to the Hindus; and, if these in the Hindus are to be deemed marks of a high state of civilization, Africa, Mexico, Peru, Persia, and China, might also lay claim to the same character. He also gives his own sentiments as to what constitutes good laws, a good religion, a high state of civilization, and shews at what a very low degree Hindostan deserves to be estimated for these acquirements[178]. The Political Economy is, I think, excellent, and the part that I have read may be considered as the author's view of the progress of the human mind. I hope it will bring him fame and reputation,--his perseverance as well as his other qualities well deserve it....

Like the Patriarchs of old I am surrounded by all my descendants, sons, daughters and grandchildren--they have assembled from all quarters to visit us, and if I were not afraid that they would soon become too numerous for the limits of our house I should insist on its being an annual custom.

You have probably seen in the papers that I am gazetted as one of the three from whom the choice of Sheriff is to be made, and as Col. Berkeley, the first named, will in all probability be excused on account of his intended application to the House of Lords for the Peerage which must otherwise be given to his brother, who is nearly of age, I shall no doubt be selected. This honour I could well have dispensed with....

Ever yours,
DAVID RICARDO.

NOTE.--In Say's 'Oeuvres Diverses' (vol. i. p. 413) is printed a
letter of Ricardo to Say, dated from Gatcomb, 18th Dec. 1817. He
says amongst other things: 'Since your visit to England, I have been
by degrees retiring from business; and, as our debt is enormous and
the price of stock very high, I have from time to time withdrawn my
capital, and have laid out much of it in land.... My life is made up
of successes and cares; hence I am providing for the future as much
as I can, that I may get rid of anxiety altogether. Our friend Mill
is about to publish his book on India, on which he has been at work
for several years. With powers like his, nothing can fail to become
interesting and instructive under his pen; and I am convinced that
this book will exceed the expectations of his closest friends. It is
in type; and he has kindly given me an early copy. I have read more
than half of the first volume, and I hope it will produce on
competent judges the same impression that it has made on me. What he
says on the government, laws, religion, and manners of the country
is of great weight; and the comparison he draws between the former
condition of Hindostan and its present condition seems to me to
decide the question of the high state of civilization attributed to
the former.... Your _Traite d'Economie Politique_ increases in
reputation among us, in proportion as it becomes better known.
Extracts from it (and from my own book) have recently appeared in
the British Review, and its merit has been recognised. I have not
fared so well; the reviewer has found in my book ample material for
criticisms, and hardly a single passage worthy of praise.'

LXV.

LONDON, _30th Jan., 1818_[179].

MY DEAR SIR,

During your visit in London next week I hope you will stay with us in Brook Street, and I am commissioned by Mrs. Ricardo to add her solicitations to mine to induce Mrs. Malthus to accompany you.

Lord King[180], Mr. Whishaw and you have done me a great deal of honour in making my work[181] the subject of your discussions, but I confess it fills me with astonishment to find that you think, and from what you say they appear to agree with you, that the measure of value is not what I have represented it to be; but that _natural price_, as well as _market price_, is determined by the demand and supply,--the only difference being that the former is governed by the average and permanent demand and supply, the latter by the accidental and temporary. In saying this do you mean to deny that facility of production will lower natural price, and difficulty of production raise it? Will not these effects be produced after a very short interval, although the absolute demand and supply, or the proportion of one to the other, should remain permanently the same? At any rate then demand and supply are not the sole regulators of price. I should be glad to understand what Lord King and you mean by supply and demand. However abundant the demand it can never permanently raise the price of a commodity above the expense of its production, including in that expense the profits of the producers. It seems natural therefore to seek for the cause of the variation of permanent price in the expenses of production. Diminish these and the commodity must finally fall, increase them and it must as certainly rise. What has this to do with demand? I may be so foolishly partial to my own doctrine that I may be blind to its absurdity. I know the strong disposition of every man to deceive himself in his eagerness to prove a favourite theory, yet I cannot help viewing this question as a truth which admits of demonstration and I am full of wonder that it should admit of a doubt. If indeed this fundamental doctrine of mine were proved false I admit that my whole theory falls with it, but I should not on that account be satisfied with the measure of value which you would substitute in its place.

I am sorry that you have determined not to publish this spring.

I have not seen Torrens, and do not know what his intentions are respecting the work which he promised to give to the public.

Sir James Mackintosh is indeed a great acquisition in more respects than one to your College[182]. It must be particularly agre[e]able to you.

I thank you for your congratulations on the hono[u]r [which] has been conferred on me by the appointment [to] the office of Sheriff[183], an honour which I could well have dispensed with. Under all circumstances I think it best not to offer an objection to it.

I wish you were of our party to-day. Mr. Whishaw, Mr. Smyth, Mr. Mallet, Mr. Sharp and Mr. Warburton dine with me.