Part 15 (2/2)
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 quant.i.ty of the precious metals, at the same time that materials and machinery were greatly increased in quant.i.ty, might not the increased aggregate quant.i.ty 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 ma.s.s 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 cla.s.ses, 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 pa.s.sages again when I got home and give them my best consideration[A][173]. On my pa.s.sing 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 quant.i.ty of food to be divided, but a.s.sume in some places that the same quant.i.ty 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 cla.s.s. These you will observe are slight objections, and I make them that I may preserve my consistency. They would not be understood by the ma.s.s 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 a.s.sist you to a good t.i.tle 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 const.i.tutes 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 a.s.sembled 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....
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