Letters of David Ricardo to Thomas Robert Malthus, 1810-1823

Part 2, With Many of the 3rd Chap., and With a Few in the Remainder of

the work. I am glad to hear that you are going to make some observations on it. I think he is an adversary worthy of your pen, and the friends of truth cannot fail to profit by the discussion. With regard to any remarks on my opinions, you must be governed by your own discretion. If those opinions are wrong, I should like to see them refuted, but, thinking as I do that they are in all essential points founded on correct principles, I ask for no mercy. I do not care how severely they are attacked; there is nothing you could say of them which would hurt me, if what you said did not express contempt, and that I know you do not feel for me. Act therefore towards me as if I were a perfect stranger, and notice me or not as you think best.

I cannot hesitate in agreeing with you that, if from a rise in the relative value of corn less is paid for fixed capital and wages, more of the produce must remain for the landlord and farmer together; this is indeed self-evident, but is really not the matter in dispute between us, and I cannot help thinking that you overlook some of the circumstances most important connected with the question. My opinion is that corn can only permanently rise in its exchangeable value when the real expenses of its production increase. If 5000 quarters of gross produce cost 2500 quarters for the expenses of wages, etc., and 10,000 quarters cost double, or 5000 quarters, the exchangeable value of corn would be the same; but, if the 10,000 quarters cost 5500 quarters for the expenses of wages, etc., then the price would rise 10 p.c., because such would be the amount of the increased expenses. A rise of the price of corn and a fall in the corn price of labour is [sic] in my opinion incompatible, unless it be owing to something in the currency; and it is not necessary to enquire here what effects that would produce. Observe that I do not question that each individual labourer may receive a less corn price of labour, because I believe that would be the case, but I question whether the whole corn amount of wages, etc., paid for the cultivation of the land can be diminished with an increase of the exchangeable value of corn. If no more labourers were employed and the price of corn rose, your proposition could not be disputed; but the cause of the rise of the price of corn is solely on account of the increased expense of production.

I have lost Lord Lauderdale's pamphlet, or rather it has been taken from my office. If I can get another, it sha accompany this. The improvement in agriculture I believe have had more effect in kee down r than we have ever imagined. On my theory they fully account for rents being no higher; on yours they would tell the other way.

I meant to reproach you when I saw you [for] speaking of Mr. Jacob's pamphlet with so much [praise] as you did when Mr. Basevi asked your opinion of it. I am glad you allow he is very deficient in scientific knowledge.

You will see by what I have said that a rise in the price of corn is always in my opinion accompanied by a less material surplus produce; but it may be of equal value as compared with other things. Of this produce the landlord gets so large a share that in spite of the rise of produce the situation of the farmer is constantly getting worse.

Yours very truly, DAVID RICARDO.

XXVII.

LONDON, 17 March, 1815.

MY DEAR SIR,

If your statement was correct, this extravagant consequence would follow from it: That in proportion as population increased and worse land was brought under cultivation, the proportion of produce to the corn expenses of procuring it would increase. If we now had twenty millions of quarters with an expense of five millions of quarters, we should when we expended ten millions of quarters obtain more than forty, notwithstanding that in the latter period many more than double the quantity of hands were employed in cultivation in consequence of the poorer quality of the land. If this be true, the principle of population is false, because the more you increase the people, the greater surplus of abundance will appear. Your statement is however very ingenious, and carries a great deal of plausibility with it; but I think you err in supposing it possible that the proportion of the whole corn expenditure to the produce obtained can fall, with an increase of the price of corn. The two are incompatible; either the whole corn expenses of production will be increased or not. If they be, the price of corn will rise; but, if they be not, I can see no reason for a rise in the price of corn. I admit that it is only the last portion of capital employed on the land which will be attended with an increased corn expense; but, unless it renders the whole produce together at an increased expense, the price of produce will not rise. Suppose the produce of the country ten millions of quarters with the price at £4 per quarter, the number of labourers employed two-and-a-half millions, each receiving two quarters of corn annually as wages. Suppose too that the population increases and five millions of quarters more are required, but that it cannot be obtained with less labour than that of two millions of men. If we suppose the price to increase in proportion to the number of men employed, it will rise to £4 16s., because to raise ten millions of quarters an average of three millions of men would be now required instead of two-and-a-half millions. Suppose now each man to consume one quarter annually for food and to exchange the remainder for other necessaries. Fourteen bushels will be sufficient wages for him; the expenditure of corn for wages will then be for fifteen millions of produce 7.875.000, and for ten millions 5.250.000. Before, it was only five millions; consequently the proportion of surplus produce has diminished.

In making this calculation I have very much favoured your view of the question, because the price of corn would not, I think, rise in proportion to the greater number of men employed but to the greater amount of wages paid; it would not therefore rise to £4 16s., but to £4 4s., because as 5 : 5-1/4 :: £4 : £4 4s. But, if the price was only £4 4s., more corn would be required by the labourer than fourteen bushels, that calculation being founded on a greater exchangeable value of corn. It appears too that your statement if true does not account for the less proportion of the population now emp[loyed upon] the land, because you always suppose more men to [be employed] but at less corn wages. It can never happen, I think, that profits can fall and encourage the cultivation of poor [land in] the manner assumed in my table without a rise in the price of corn. It is by the rise of the price of corn that all other profits are regulated to agricultural profits. If the price of corn remained low, money wages would not rise, and general profits could not fall. If it be true that capital has become more and more productive on the land, it can, I think, only be accounted for on the supposition that great improvements have taken place in agriculture, and that wages have been kept moderate by the improvements in those manufactures which supply the poor with the necessaries on which a part of their wages are expended.

What a dreadful change in our political horizon has occurred within a few days! Will it be possible to remain at peace if Bonaparte establishes himself as sovereign of France? The prospect is very gloomy.

... Ever yours, DAVID RICARDO.

XXVIII.

LONDON, 21 March, 1815.

MY DEAR SIR,

On no subject that we have been lately discussing have we so materially differed as on the one now occupying our attention. Your position, if established, would, I think, overturn both your theory of rent and population, for I understand you to maintain that the higher the price of corn rises, in consequence of more men being employed on the poorer land, the greater will be, not only the surplus produce after paying the labourers, but the ratio of that surplus produce to the whole capital employed on the land. If this be true there is no check to the increase of population, and food can be increased in a ratio exceeding that at which mankind increase. Your statement requires that with every additional labourer not only an equal increase but a greater increase of surplus produce should be obtained. More labourers may then be employed without limit, and rent and profit together must not only increase, but increase in a geometrical progression. I am sure I am correct in thus stating your proposition, because if as you say the whole corn expense of production per quarter will be diminished with every rise of price, the surplus must increase in a geometrical ratio with the capital employed. If you meant only that the surplus produce would increase with every accumulation of capital on the land, though in a diminishing ratio to the capital employed on the land, that is not only advanced, but strenuously maintained as the groundwork of my theory, and is the basis also on which my table is formed. You have misapprehended a passage in my last letter. I certainly never said, nor ever thought, that any good reason could be given for an increased number of men being required to produce precisely the same quantity of corn from precisely the same land. What I said was that, if at one period the number of labourers required to produce ten millions of quarters of corn was two-and-a-half millions of men, and at another, in consequence of increased demand, fifteen millions of quarters could not be produced with a portion of worse land at a less cost of labour than that of four-and-a-half millions, at this latter period a production of ten millions would require three millions of men, because fifteen is to four-and-a-half as ten to three, and if we supposed the price of corn under such circumstances to increase in the proportion of 2-1/2 to 3, a supposition much more favourable to your view of the question than we should be obliged to concede, yet that it would not support the conclusions to which you arrive, but, on the contrary, would prove my theory to be the correct one. If the calculation had been made, as you think would have been more correct, on an increase from ten millions to ten-and-a-half millions, the result would have been the same, but we should be puzzled with the decimals or fractions which must be employed on such a supposition. I agree with you 'that the natural price of corn depends entirely upon the price of the last addition, and it does not matter whether with regard to the old land a capital yields 50 per cent. rent and profit or 20 per cent. In either case the price of corn on such land has nothing to do with the cost of production.' I do not see how the admission of this fact can assist your argument, which relates only to the ratio of the surplus produce to the whole capital employed.

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