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The following Reading List is a collection of essays and book chapters that concern the life and work of the English economist David Ricardo (1772-1823). Several are taken from the Cambridge University Press edition of the works of David Ricardo edited by Piero Sraffa.
[The image comes from “The Warren J. Samuels Portrait Collection at Duke University.”]
Timeline of the Life and Work of David Ricardo:
Leonard P. Liggio, Literature of Liberty: A Review of Contemporary Liberal Thought was published first by the Cato Institute (1978-1979) and later by the Institute for Humane Studies (1980-1982) under the editorial direction of Leonard P. Liggio. Chapter: Bibliographical Essay: Economics and Ideology: Aspects of the Post-Ricardian Literature
Accessed from oll.libertyfund.org/title/1292/100248 on 2009-10-20
This work is copyrighted by the Institute for Humane Studies, George Mason University, Fairfax, Virginia, and is put online with their permission.
David Ricardo (1772–1823), author of the influential Principles of Political Economy and Taxation (1817), belongs to that more or less cohesive “school” of political economy for which Karl Marx coined the label “classical economics.” As a “comprehensive liberal philosophy” classical economics transcended narrow positivist economic science and attracted public attention, especially during the nineteenth century, by urging public policy reforms along a broad front of political, social, and economic issues. Armed with the analytical tools of political economy, the classical economists attacked the thorny contemporary problems of inflation, commercial and agricultural policy, as well as economic growth and the possible limits of the burgeoning population of the Industrial Revolution. Chief among the Scottish and English “classical” economists during the 150 years from the birth of its mentor Adam Smith to the death of John Stuart Mill, the eloquent voice of liberalism in transition, were: Adam Smith (1723–1790), Jeremy Bentham (1748–1832), Thomas Robert Malthus (1766–1834), David Ricardo (1772–1823), James Mill (1773–1836), Robert Torrens (1780–1864), John Ramsay McCulloch (1789–1864), Nassau William Senior (1790–1864), and John Stuart Mill (1806–1873).
Controversy and partisan ideology becloud scholarly interpretations of Ricardo's and “Ricardian” economics. Ricardo and the other classical economists looked to Adam Smith's Wealth of Nations (1776) for their inspiration and analytic paradigm of how to do political economy in a comprehensive sense. However, the pressures of the Industrial Revolution, the inflationary storms arising from the Napoleonic Wars, and exploding technology, population, and social unrest taxed the classical economists to extend the scope and methodology of Adam Smith to deal with nineteenth-century issues. Opinions vary on how closely Ricardo himself hewed to the Smithian paradigm. In his own opinion, Ricardo in the Preface to his Principles believed that he was walking in Smith's footsteps (and those of his Continental followers) and merely dealing with a new set of problems left unsolved by his predecessors:
To determine the laws which regulate this distribution is the principal problem in Political Economy: much as the science has been improved by the writings of Turgot, Stuart, Smith, Say, Sismondi, and others, they afford very little satisfactory information respecting the natural course of rent, profit, and wages.
Later economists disagreed on the impact and meaning of Ricardo's and the “Ricardians'” contributions to economics and whether Ricardian economics represented a “detour” from Smithian analysis. Begrudgingly and waspishly, John Maynard Keynes declared that Ricardian economics “conquered England as completely as the Holy Inquisition conquered Spain.” J.R. McCulloch, Ricardo's fellow “classical” economist, saw Ricardo's Principles as beginning “a new era in the history of the science.” Marx, however, judged 1830 as the end of Ricardian economics. Finally, Schumpeter's influential opinion held that the “Ricardians were always a minority in England.” More extravagantly the “Ricardian” man of letters, Thomas De Quincey wrote of his mentor's advancement of economic learning:
All other writers had been crushed and overlaid by the enormous weight of facts and documents; Mr. Ricardo alone had deduced, a priori, from the understanding itself, laws which first gave a ray of light into the unwieldy chaos of materials, and had constructed what had been but a collection of tentative discussions into a science of regular proportions now first standing on an eternal basis.
Amid such dissent over Ricardo's place in the development of nineteenth-century economics, it is necessary to determine whether Ricardo's economic analysis and Ricardian procedure represented a genuine contribution or was an unfortunate “detour” from the emerging general-equilibrium procedure and analysis.
This essay examines two themes central to the literature on nineteenth-century “classical” economics. The first is that of an alleged dual development of economic theory—a development that contrasts “Ricardian” procedure on the one hand with embryonic general-equilibrium, or “neo-classical,” procedure on the other. My second theme concerns the motives for the so-called “bourgeois dissension” from Ricardian theory following David Ricardo's death in 1823. Past writers have regarded this dissent as a reaction against the ideological use made of Ricardian theory by the “labor writers,” and particularly against Marx's interpretation of Ricardo. In Sections I to III, I sketch the received doctrine on these matters. In the remainder of the essay I shall argue that the nineteenth-century record actually portrays a common theoretical heritage shared by most economic writers regardless of ideology: allocation via the price mechanism. This rules out any dualistic categorization of economic developments into “Ricardian” as opposed to general-equilibrium streams. I shall also argue that we cannot usefully interpret in ideological terms the “bourgeois dissension” (a subject easy to exaggerate).
Economists from diverse ideological backgrounds share the notion of a “dual development” of economic theory. Such a “dual development” theory is common both to J.A. Schumpeter's History of Economic Analysis (probably the best known history of economics ever written) and to a variety of interpretations in the Marxian tradition (for example, Maurice Dobb's Theories of Value and Distribution Since Adam Smith). Those who endorse this “dual development” approach largely agree in terms of this theory's substantive content. Differences among these economists lie in their evaluations of the evidence; these evaluative differences flow from the perspective of the particular “ideal type” of analysis which each economist uses to evaluate the early literature.
Thus, Schumpeter's economic vantage point is the (Walrasian) general equilibrium analysis of productive organization. The characteristic feature of this “ideal type” of economic analysis is the simultaneous determination of the prices of outputs and productive services (land, labor, capital) by the market demand-supply mechanism.1 The simultaneity of the economic process is seen in the demand prices of productive services in each use. These prices derived through the “imputation” among them of the value of the final output, utilizing the principle of substitution at the margin in both production and consumption. Simultaneity also appears in the role played by the returns to productive services in the determination of product prices.
In production, this principle states that each productive service ought to be employed so that the ratios of the marginal products of all productive services are equal to the ratios of their prices. In consumption, it states that consumers ought to allocate their consumption so that the ratios of the marginal utilities of all goods consumed are equal to the ratios of their prices. Any departure from the requisite ratio equality in the case of either a particular productive service or a particular consumption good will lead to substitutions. Such substitutions occur either (a) in the use of productive services or (b) in the consumption of commodities so as to reestablish all desired ratio equalities. Simultaneous determination occurs since it is possible for each decision to be made without others having to precede it temporally. All relations in the economic analysis are represented by an interrelated system of mathematical equations. Consequently, several determinations are made simultaneously: the determination of the product prices, the determination of the demand prices, of productive services, the determination of the desired mix of productive services in production, and the determination of the desired mix of output produced. Each decision necessarily reflects and requires the other through the market demand-supply mechanism. The simultaneous determination of all required economic magnitudes constitues the general equilibrium
Within this general-equilibrium model, the problem of distribution—envisaged as the pricing of productive services—is simply one aspect of the analysis of productive organization. In this analysis, given resources are allocated between different uses and within each use by means of price competition.
Ricardian economic procedures, according to the Schumpeter-Knight historiography, are diametrically opposed to the spirit of general equilibrium. Above all, they are opposed to its conception that the returns to factor services are competitively determined prices: “The problem of distribution, the sharing of a joint product among an indefinite number of agencies (owners) cooperating in its creation, not merely was not seen as a problem of imputation, but was not approached as a problem of valuation at all.”2 The Ricardian approach was to consider the problem of distribution in terms of these aggregate class shares. Ricardo employed a model that accounted for rent as a differential surplus, wages by the subsistence theory, and profits as a simple residual.
In dealing with the determination of the laws regulating distribution—his fundamental problem—Ricardo is said to have arbitrarily reduced the number of variables in his model until he was left with but one variable, namely profits. These profits were determined as a form of residual (the difference between the marginal product of labor and the subsistence wage rate), by the one equation of the system. This particular approach was dictated, so runs Schumpeter's argument, by Ricardo's “inability to deal with systems of simultaneous equations,”3 and his failure to appreciate the notion of incremental variation, that is, of factor and product substitution.4 Schumpeter's argument further contends that Ricardo had no conception of the demand-supply apparatus—that he was “completely blind” to its nature and logical place in economic theory. Ricardo restricted demand-supply analysis to the short-run case of given supplies and monopoly. Further, Ricardo envisioned the labor theory (which he applied to long-run exchange values), as “distinct from and opposed to” demand-supply theory.5 Schumpeter further argued that the specific engine of analysis which Ricardo devised, constituted a “detour” in the development of economic analysis. For, had not A.R.J. Turgot, Adam Smith (in significant chapters of the Wealth of Nations) and in particular J.B. Say, Lord Lauderdale and T.R. Malthus previously achieved a considerable insight into the “correct” approach towards productive organization? This earlier approach viewed distribution as the pricing of requisite and scarce services.6
Despite these earlier efforts and the work of “the men who wrote above their time” (the “dissenters”) during the post-Ricardian period (especially Mountifort Longfield)7 , it was only during the last three decades of the nineteenth century “that the conception of an economic cosmos that consists of a system of interdependent quantities was fully worked out with all its problems, if not quite satisfactorily solved, at least clearly arrayed and with the idea of a general equilibrium between these quantities clearly established in the center of pure theory.”8
An exact “mirror image” of Schumpeter's “dual development” reading of the evidence appears in Maurice Dobb's Marxian study. Dobb discerns two streams of thought—two classical traditions—relating to exchange and income distribution. Both streams flow (albeit in very different ways) from Adam Smith as fountainhead.
The first classical tradition originated in Smith's cost of production theory (the “adding-up-components” version). For Smith competition, through the operation of supply and demand, assures that market prices gravitate towards “natural” prices. These “natural” prices are defined as the sum of the unit wage, unit profit and unit rent costs when the factors of production are paid at their “natural” rates. These “natural” or necessary factor payments are in turn determined by the general conditions of supply and demand for labor, capital and land. This approach “etched in lightly and suggestively by Smith” was developed by the Longfield-Senior group, by John Stuart Mill, and subsequently by W.S. Jevons and Alfred Marshall. Full fruition was reached with the Austrian school and the Lausanne school. In the economic theories of these schools (according to Dobb) “product prices and income-distribution [are] assimilated into one system of mutual and simultaneous determination of product-prices and factor-prices in interaction.”9
The second classical tradition—far from constituting a “detour” was, Dobb believed, the true tradition. It flowed from Smith in the sense of being a reaction against his system. Ricardo replaced Smith's “peculiar” value theory “to make conditions of production, and in particular quantities of labor expended in production, the basic determinant [of value] alike in capitalist and pre-capitalist society.”10 The Ricardian system placed distribution in center stage. Dobb contrasts Ricardo with Smith in the following passage:
Whatever his reason may have been for regarding distribution as the central problem, his instinct in doing so was undoubtedly right, and his mode of treating distribution was crucial. He saw that this had to be explained in terms peculiar to itself and not as an outcome of general supply-demand exchange relations, as Smith had treated it … Moreover for Ricardo an answer to the question about distribution was a necessary and prior condition for calculating the effect of a change in wages on prices (both general and individual prices): in other words for calculating the ‘modifications’ of relative prices introduced by differences in technical coefficients of production, affecting particularly the use of fixed capital.11 .
In brief, distribution had logical priority over prices or exchange values. Dobb's Marxian view of the Ricardian tradition divorces distribution from the general pricing process. The wage rate is determined “exogenously,” that is, outside of the exchange system, and profits are a residual.12
The formal identity between the interpretations of Schumpeter and Dobb, insofar as concerns the content of Ricardian theory, will now be apparent. Both emphasize Ricardo's alleged divorce of distribution and exchange; both note that the absence of a notion of distribution is a problem in factor pricing. Both lay great stress on the conception of an exogenously determined wage rate. They also share the notion of a “dual development” of economic theory. But the difference between them is also clear: Schumpeter treats the Ricardian characteristics in question as an inexcusable lapse, a failure to appreciate the nature of economic analysis. They lead to a result that lacks sense. By contrast, Dobb views the same characteristics as a matter of deliberate choice reflecting a full appreciation of the nature of scientific economics.
Dobb's position may be placed in broader perspective. The modern “Cambridge” school of economists finds little merit in general equilibrium procedure in principle. It champions, rather, an approach involving the treatment of prices, production levels, and distribution by means of separate models, with an eye upon the isolation of “one-way-direction” relationships or the “causal ordering” of variables.13 This is a method attributed to Piero Sraffa, as well as to Marx, as we shall see. Because the function of the economist is believed to consist in the specification of “causal” relations where appropriate, “Cambridge” economists attach great merit to the specification of the real wage in cultural or institutional terms and the treatment of profits as residual.
The “Cambridge” economists reflect a number of specific interpretations of Ricardian theory. I have in mind, first, Piero Sraffa's interpretation of Ricardo's Essay on the Influence of a Low Price of Corn on the Profits of Stock based upon the assumption that in the agricultural sector both output and input consist of a single homogeneous commodity (“corn” or grain), so that the rate of profits may be determined in terms of physical product independently of consumer valuation.14
How is this profit rate determined concretely in this framework? This profit rate is set at the margin of cultivation; that is, by farmers cultivating land that is the least fertile or farthest from market centers. This comes about as follows: as the cultivation of land expands in response to the growth of population, farmers have to bring less-productive land under cultivation. On that land a given amount of the farmer's labor and capital produces a smaller output than on more fertile or better located land. In this view, the exchange value of output depends on the units of labor and capital used to produce it. Accordingly, the exchange value of output produced on less fertile (or more poorly situated) land is held to exceed that of output produced on better land. It is this exchange value that will constitute the general market price. (In this theory the difference between the market price so determined and the value of output produced on better land is, of course, rent).
On all land under cultivation, there can be only one rate of wages and one rate of profits. The wage rate in real terms is set by the ratio of the “wage fund” (assumed to be a definite share or portion of real consumer goods) to the labor pool and tends towards subsistence. The rate of profit is set equal in all employments by the mobility of capital. But, as cultivation extends to less-productive lands and market prices of farm produce rise, the nominal (or money) value of the wage fund rises. The exchange value of output will not change unless the amount of labor content changes. Hence, a rise in the level of nominal wages (due to the results of the extension of cultivation) must be accompanied by a fall in the level of profits. Consequently, the rate of profits is set by the margin of cultivation.
Given the profit rate in agriculture as determined by this margin of cultivation—the wage basket consisting of a fixed quantity of grain or “corn”—a specific ratio of the price of manufactures to that of corn is implied, namely that which brings the profit rate in the manufacturing sector into line.
Luigi Pasinetti's algebraic formulation of Ricardo's system (attributed to the “mature” Ricardo of the Principles) is one which, in contrast to Sraffa's corn-profit representation, formally adopts the labor theory of exchange value.15 The Ricardian system is represented by a two-commodity model involving a wage-good (corn) and a luxury-good, the latter identified with the standard of value (“gold”). The monetary unit is taken to be the constant gold output of one worker for one year: “gold” represents in this model an invariable measure of value. Corn is also produced in a one-year process. In both sectors, wage-goods or circulating capital alone is required, and the capital stock at the beginning of the year is presumed to be a given, as is the corn wage. Given the land area and the state of technology, Pasinetti's (fourteen) equations describing the system yield unique and economically meaningful solutions for the (fourteen) variables of the system, including the rate of profit. What we must emphasize for our purposes here is the independence of the general profit rate from conditions in the luxury-good sector. The profit rate is dependent solely upon the marginal product of labor in agriculture and the given corn wage, which is precisely the result of the dual sector “corn profit model“.16
A labor theory of value is not, however, required to hold that the wage-goods determine general profit. I refer to the brilliant interpretation of Ricardo by V.K. Dmitriev (1904) whose recent rediscovery has excited much interest.17 Dmitriev's analysis defends Ricardo against Léon Walras's criticism—quite ruinous if justified—to the effect that the Ricardian system is underdetermined, containing too few equations to determine the unknowns.18 But according to Dmitriev's defense there is one equation in Ricardo's system of production cost equations that yields a solution for the profit rate independently of the others. This magnitude can then be used to solve for exchange values. The unique production-cost equation is that relating to the wage-goods sector. The profit rate depends, therefore, upon the (given) “conditions of production”—the labor inputs, both direct and indirect, and their investment periods—in the wage-goods (corn) industry and the (given) corn wage.
The three foregoing representations of the “Ricardian” system—the Sraffa “corn-profit” model, the Pasinetti version of a dual-sector system based upon the labor theory, and Dmitriev's equational system—share in common the dependence of the general profit rate solely upon the conditions of production in the wage-goods sector and the (given) real wage. This result turns upon a rigid distinction between wage- and luxury-goods; it follows from the fact that wage-goods enter into the production of every product in the system while luxury-goods do not. This implies a very different conceptualization of the economic process from that of the general-equilibrium economists, for whom distribution and pricing are inextricably intertwined.
The Ricardian line, on some readings, includes the economics of Karl Marx and the economics of Piero Sraffa in his famous Production of Commodities by Means of Commodities—subtitled Prelude to a Critique of Economic Theory. To these extensions I now turn.
Alfredo Medio's influential account of Marxian theory claims that given the profit rate, we can derive prices of production. But the general profit rate itself is “a function of two basic overall features of the economy, namely a social factor, the rate of exploitation, and a technical factor, the methods of production.”19 The wage rate is a given or datum of the analysis, and it is the conditions of production of “basics” that are relevant for the general profit rate and not those relating to “non-basics” (commodities which are neither means of production nor wage-goods).20 Maurice Dobb has made the general point this way: “It will be clear … that the nature of [Marx's] approach required him to start from the postulation of a certain rate of exploitation or of surplus-value (or profit-wage ratio in Ricardo's terms); since this was prior to the formation of exchange-values or prices and was not derived from them. In other words, this needed to be expressed in terms of production, before bringing in circulation or exchange.”21
Much the same case has been made with regard to Sraffa's masterpiece. Roncaglia's recent study of Sraffa's work envisages it as an investigation of prices of production which are defined as “those prices consistent with a uniform rate of profit for all industries for given levels of output.” Sraffa's work appears concerned primarily with “the influence of the distributive variables (the rate of profit and the wage) on these prices.” Sraffa's achievement, Roncaglia contends, lies in his demonstration “that it is possible to determine relative prices without any reference to ‘marginal’ changes, i.e., with given levels of activity and given ‘proportions of factors of production’ … as a function of one distributive variable (the wage rate or the rate of profits) …”22
The import of this purported influence of the distributive variables on prices, lies in the implied break-away from marginalist or general-equilibrium procedure. Prices of production are analyzed without reference to changes in the levels of output of the various commodities in the system and without reference to demand. As Roncaglia phrases it:
In the absence of any considerations whatsoever of the factors that determine the quantity supplied or the quantity demanded of the various commodities, there is no reason to suppose that prices of production should equate the quantity demanded with the quantity supplied for any commodity in the long period or that market prices should fulfill this function in the short or very short period. In addition, in the absence of any explicit analysis of effective (market) prices the relation between market prices and prices of production must remain undetermined.
Similarly, “the emphasis that Sraffa places on the absence of change in the levels of production in his analysis represents an implicit rejection of the marginalist attempt to determine the equilibrium price and the equilibrium levels of output simultaneously.” The obverse side of the coin is that by breaking the link between price formation, the determination of the level of production and the realization of sales, Sraffa's work is brought into line with the classical economists (with some qualifications) and with Marx.23
My investigation of both the content and the origins of Ricardo's Principles—particularly the process whereby Ricardo, early in 1813, began to discern what he considered to be a number of logical errors in the Smithian position—confirms the following: what is characteristically “Ricardian” is the use of a special theory of value involving an absolute standard in deriving the inverse relationship between wages and profits—the fundamental theorem on distribution. In terms of the special measure, a rise of “money wages” implies a rise in the proportionate share of wages and a corresponding fall in the profit rate.
Schumpeter contended that Ricardianism was a flash-in-the-pan. The Ricardian system not only “failed from the start to gain the assent of the majority of English economists,” but by the early 1830s “Ricardianism was no longer a living force.”24 In making his assertion, Professor Schumpeter apparently had in mind the key role played by the so-called “absolute standard of value” in the derivation of the proposition that “profits depend upon wages.” The “absolute standard of value” was a commodity produced by a constant quantity of labor, while the particular dependence of profits upon wages was that profits vary inversely with wages. Both profits and wages were conceived as proportionate shares in an output of constant value.25
Recent historiography centrally posits a “decline” in Ricardo's authority in matters relating to the fundamental theorem of distribution and its derivation in terms of the invariable yardstick even in the work of the “Ricardians.” In his study of the “Ricardian” classical economist J.R. McCulloch, Professor O'Brien has added his authority to the view that the central Ricardian model suffered a serious decline soon after Ricardo's death in 1823. In fact, it is Professor O'Brien's general theme that while McCulloch “did much to popularize economics … it was not Ricardo's economics that he was popularizing …”26 McCulloch, runs the argument, must be considered as squarely in the Smithian tradition. A similar revisionist interpretation has recently been put forward regarding the “Ricardian” Thomas DeQuincey.27 That John Stuart Mill must also be excluded from the group constituting Ricardo's “school” has also been strongly urged: “From Marshall's Principles, Ricardianism can be removed without being missed at all. From Mill's Principles, it could be dropped without being missed very greatly.”28 Schumpeter dismisses Mill's formal ascription to Ricardianism as merely “filial piety.”
This evaluation is also characteristic of Marxian interpreters. Marx himself spoke of Mill's work as an example of the “eclectic, syncretistic compendia” which characterized the period after the collapse of “scientific” political economy in 1830.29 Along similar lines Maurice Dobb has observed of Mill: “when looking back on him from a distance one can see quite clearly that in major respects his own work was much nearer to Marshall than it was to Ricardo; and that so far as his theory of value was concerned, on the contrary to continuing and improving on Ricardo, in essentials he took his stand on the position of Smith where Ricardo had been opposing him.”30 But to make it comprehensible, we need to place the Marxian reading in broader perspective. I turn next to the issue of economics and ideology.
An important theme in Marxian historiography is that the roots of early British socialism can be traced to Ricardo. The writings of Piercy Ravenstone and Thomas Hodgskin—among other ideological opponents of “bourgeois” political economy—were said by Marx to “derive from the Ricardian form;” and Marx refers to “the proletarian opposition based on Ricardo.”31 The derivation in question was a complex one, entailing adoption and development of Ricardian value theory, rid, however, of any allowances for the independent productivity of capital. In Marx's analysis the champions of the proletariat …
seize[d] on this contradiction, for which they found the theoretical ground already prepared. Labour is the sole source of exchange value and the only active creator of use-value. This is what you say. On the other hand you say the capital is everything, and the worker is nothing or a mere production cost of capital. You have refuted yourselves. Capital is nothing but defrauding of the worker. Labour is everything. This, in fact, is the ultimate meaning of all the writings which defend the interests of the proletariat from the Ricardian standpoint basing themselves on his assumptions.32
As one exmple: Thomas Hodgskin's insistence upon the nonproductivity of capital was the “inevitable consequence of Ricardo's presentation.”33 What was involved, according to Marx, is a kind of inversion of the Ricardian analysis.34
There is a second closely related feature of Marx's reading of the record. The “bourgeois” reaction against Ricardo—the so-called “dissenting” literature of the 1830s and 1840s—must be understood, runs Marx's argument, as a reaction to the use made of Ricardian doctrine by the labor writers. What is referred to as “vulgar” political economy:
only becomes widespread when political economy itself has, as a result of its analysis, undermined and impaired its own premises and consequently the opposition to political economy has come into being in more or less economic, utopian, critical and revolutionary forms … Ricardo and the further advance of political economy caused by him provide new nourishment for the vulgar economist …: the more economic theory is perfected, that is, the deeper it penetrates its subject-matter and the more it develops as a contradictory system, the more is it confronted by its own, increasingly independent, vulgar element, enriched with material which it dresses up in its own way until finally it finds its most apt expression in academically syncretic and unprincipled eclectic compilations.
Marx further argued that vulgar political economy “deliberately becomes increasingly apologetic and makes strenuous attempts to talk out of existence the ideas which contain the contradictions” —contradictions that were “in the process of being worked out in socialism and the struggles of the time.”35 It is precisely this reading of the record that reappears in the famous Afterword to the second German edition of Capital. Here Marx portrays Ricardo as the “last great representative of political economy,” and the year 1830 as the watershed between “scientific” and “apologetic” or ideological, class-centered economics:
In France and in England the bourgeoisie had conquered political power. Thenceforth, the class-struggle, practically as theoretically, took on more and more out, spoken and threatening forms. It sounded the knell of scientific bourgeois economy. It was thenceforth no longer a question, whether this theorem or that was true, but whether it was useful to capital or harmful, expedient or inexpedient, politically dangerous or not. In place of disinterested inquiries, there were hired prizefighters; in place of genuine scientific research, the bad conscience and evil intent of apologetic.36
Marx's reading of the motivation behind the dissenting literature was accepted by Professor Meek in his well-known analysis of “the decline of Ricardian economics in England.”37 To explain “the strength, vigour and virtual universality of the early reaction against Ricardo” economists had to resort “above all … to the fact that a number of elements in his system seemed to set limits to the prospects of uninterrupted and harmonious progress under capitalism. In particular, the work of the Ricardian socialists revealed certain disharmonies and pessimistic implications of Ricardo's system so forcibly that the economists of the day could hardly avoid being influenced by them in the course of their evaluation of Ricardo.” Similarly, the majority of economists were very much aware of the “dangerous use to which a number of radical writers were putting certain Ricardian concepts.” Meek contends that as far as concerns the theoretical core of Ricardianism, the
concepts of value as embodied labour and profit as a kind of surplus value, which had proved so useful to the radicals, were among the first to be amended or rejected: value began to be conceived in terms of utility or cost of production, or sometimes (as with [Samuel] Bailey) as little more than a mere relation, and profit came to be explained not as the result of something which the labourer did but as the result of and reward for something which either the capitalist or his capital did.38
I turn in the rest of my essay to matters of criticism. In the first place I wish to argue that we need to abandon the entire concept of a “dual development” of economic theory. I base the following summary statement on my forthcoming study of the Economics of David Ricardo39 and related researches.
The notion that Ricardo did not possess a demand theory, or at best only a rudimentary one, is a preposterous but all too common belief; and it is a contention central to the approach that attempts to distinguish his economics from the general-equilibrium tradition. It is not difficult to demonstrate Ricardo's sophisticated appreciation of demand-supply technique and its use (together with the principle of profit-rate equalization) in the analysis of a variety of disturbances, such as subsidies, taxes, wage variations, and so forth. This method of analysis lent itself to a sharp distinction between the allocative consequences of changes that affect all sectors of an economy equally and those changes that affect each sector with a differential impact. This method—fully consistent with that of Alfred Marshall—was in fact the only one required by Ricardo in the derivation of the inverse profit-wage relationship. That Ricardo did not formally use it for this purpose is not in question; he chose rather to base himself upon the construction of the measure-of-value device.
To understand why Ricardo proceeded in this way, it is necessary to make conjectures. It is possible—I would say probable—that Ricardo was eager to make his case in terms of the ideal measure because the dependence of the return on capital upon the proportionate shares strikes the eye particularly clearly in terms of this formulation. But, whatever the reason, the only rationale for the inverse profit-wage relation when we focus upon the process of industry adjustments to disturbances (a rationale which Ricardo himself provides, although not in this context) is that involving the market mechanism. And we must firmly emphasize that in this context there is no sense to the notion that the matter of distribution is somehow solved prior to pricing.
Ricardo himself may be partly responsible for the erroneous notion to the contrary. He was prone, especially in the first chapter of his Principles, to assume a (lower) profit rate corresponding to a (higher) wage rate by use of the measure-of-value mechanism; next, he was prone to apply this profit rate to determine the new equilibrium cost prices that emerge following the disturbance. But Ricardo designed this procedure as a predictive device rather than as an account of process analysis. In the latter context the new equilibrium profit rate emerges along with, and not prior to, the new equilibrium price structure.
Earlier in this essay we approached the general issue of the relation between distribution and pricing from the persepctive of the consequences of a change in the wage rate. We now approach the matter from the reverse perspective, that of the consequence upon distribution of a change in the pattern of demand for final goods.
Insofar as concerns distribution itself, it is clear that wages are treated as a (variable) price determined by demand-supply relations; Ricardian theory is not of the fixed-wage variety.40 Here we must emphasize that the analysis proceeds at the aggregate level, labor demand being represented by part of the capital supply, and labor supply by the work force; it is the average wage that is at stake not the wage rate paid to particular categories of workers. Now, we need to stress that Ricardo's analysis of the allocative effects of changes in the pattern of demand is limited in exactly the same way as in Adam Smith's formal statement in the Wealth of Nations. There—because of Smith's assumption of identical capital-labor ratios everywhere—such changes affect (temporarily) the factor returns in the particular industries involved, but not the general return and thus not the average wage. But Ricardo took an important analytical step forward in his chapter “On Machinery.” Here he introduces variations in the circulating-fixed capital division and traces out the implications for labor demand and the wage rate. If we extend generally the principles developed in this discussion, we can in no way avoid the conclusion that changes in the pattern of final demand may affect the demand for labor and thus the general wage rate) by altering the overall circulating fixed capital rate. There are no “paradigmatic” differences between Ricardian and neo-classical theory insofar as concerns the effects upon distribution of a change in the pattern of final demand. The notion of a sharp divorce between distribution and pricing does not stand up to close examination.
But what justification is there in arguing that the differences between Ricardian and Marshallian economics do not involve matters of principle but only matters of detail? Or further, to argue that this allows a transfer from one to the other by way of minor revisions (suggested indeed by Ricardo himself)? It is clear that this constitutes a very tricky problem. For it is one of the characteristics of economic theory that different analytical models may be described in terms of one another. Thus, there is admittedly great difficulty in identifying those differences that constitute alternative simplifying assumptions (including different values accorded to the key variables) from those which constitute matters of principle. Were the assumptions of uniform factor ratios and constant commodity wages used by Ricardo over and over again without significant exception, the obvious implication would necessarily be that they represent features of his “basic model.” In that case it would be unconvincing to argue that Ricardo “could” easily have opened his model in these respects. The objection would be compounded if the techniques of resource allocation were as scarce in his work as is commonly believed.
My position, however, is based upon a two-fold demonstration: first, that Ricardo, on matters of fundamental import and not merely casually, himself released the two simplifying assumptions; and second, that he himself applied the principles of allocation—demand-supply analysis, profit rate equalization—to a wide variety of issues in a sophisticated way. Needless to say, he did not consider all the possible situations where a relaxation of the two key assumptions has profound consequences, or all those that require treatment in terms of allocation theory. But, to relax the assumptions and to apply the theory of resource allocation to a broader range of issues is to follow along a route laid out by Ricardo himself, using tools of analysis provided by Ricardo. It does not imply illegitimate transfer from one general model to another; nor, to be more specific, does it require our reading into Ricardo of a body of Marshallian theory that in reality is not there.
A further vital outcome of my analysis is that the profit rate in agriculture does not play the strategic role in the system envisaged in the various mathematical formulations of the Ricardian system outlined above. A number of illustrations reveal this key fact: technological improvement in the agricultural sector releases labor and capital for employment in other sectors, which are reabsorbed elsewhere with no alteration in their respective returns; the price of corn falls to the lower cost level and the return in agriculture (temporarily raised) comes back into line with the given general rate. Thus, despite a change in the “margin of cultivation,” the profit rate remains constant. Similarly, freer corn importation leaves the general profit rate unchanged despite a contraction of the domestic margin. The process involves a fall in the price of corn and the transfer of resources to the manufacturing sector with no effect on the general profit rate. Precisely the same argument holds for the case of a corn-export subsidy; indeed, much of this analysis proceeded (for simplicity) on the assumption that agriculture is a constant cost industry, so that after expansion the corn price falls to the original cost level.
Now Ricardo certainly insisted that if the price of luxury goods (silks, velvets, etc.) rose there would be no effect on profits “for nothing can affect profits but a rise in wages; silks and velvets are not consumed by the labourer, and therefore cannot raise wages.”41 But this is a quite separate analytical issue. Ricardo himself tried hard to keep the issues separate. Thus, he recognized the possibility that technical change might reduce the cost and price of corn and yet leave “money” wages unaffected—in which case the profit rate remains unchanged (although the commodity wage rises).42 Similarly, an increase in the price of corn might leave the money wage unchanged with laborers reducing their consumption of other goods (in which case the profit rate is again unaffected).43 With such a wide variety of possibilities it is quite essential not to confuse the effects on the profit rate induced by a change in the margin of agriculture itself—and I argue there are none—and the effects of a change in the price of corn working upon the general profit rate by way of money wages. It is only the attribution to Ricardo of a fixed (real) wage assumption that precludes this essential distinction.
We are also in a position to examine the validity of Léon Walras's criticism of Ricardian procedure. Walras's complaint, it will be recalled,44 was that the Ricardian system is underdetermined, even if rents are excluded from selling prices and wage costs are assumed given. The equation relating selling price to the sum of wage and interest charges cannot determine price unless interest charges are known, while interest charges are themselves determined by the difference between the unknown selling price and wage costs. Dmitriev's defense of Ricardo turned precisely upon the property that I have excluded, namely, that the general profit rate is yielded by that cost equation pertinent to the wage-goods sector, independently of all the other equations (provided the real wage is given the system is a determinate one).
My defense of Ricardo against Walras's charge runs along completely different lines. The simple point is that Walras failed to recognize the key role played by demand in the Ricardian system. Marshall was well aware of this characteristic and went out of his way to make the point in his defense of Ricardo against the strictures of Walras, W.S. Jevons, Carl Menger and others. Marshall, in fact, found Ricardo's formulation preferable to that of Jevons, who “substitutes a catena of causes for mutual causation.” Ricardo's doctrine “though unsystematic and open to many objections, seems to be more philosophic in principle and closer to the actual facts of life.”45 Unfortunately, “Jevons's criticisms of Ricardo achieved some apparently unfair dialectical triumphs, by assuming that Ricardo thought of value as governed by cost of production without reference to demand”—a “misconception of Ricardo … doing great harm in 1872,”46 and one, we may add, still prevalent a century later.47
In the light of these and related considerations it would appear that the contrasts between Ricardian and neo-classical procedures are not such as to justify the notion of a “dual development” or two separate streams of nineteenth-century thought.48 To say this is not, however, to suggest an identity of procedure and certainly not an identity of preoccupation. It is to suggest rather the sharing of a common heritage or “central core,” which amounts largely to allocation theory and mechanisms of demand-supply analysis.
I turn next to Marx. As noted above, the conception of a solution to distribution prior to pricing characterizes much of the literature relating to Marx. I believe that the same kind of argument that I have made against this interpretation in Ricardo's case applies here also: the relationship between distribution and pricing that Marx had in mind was precisely that which characterizes standard Ricardian theory. And in Marx's case too the erroneous interpretation flows both from the attribution to him of a fixed-wage assumption and from a methodological complexity that almost precisely parallels that discussed above regarding Ricardian procedure.
The problem flows from the organization of Capital in terms of a sequence of volumes, the first based on the labor theory and the third based on prices of production—the famous “transformation” procedure—that suggests a solution to distribution in the “value” scheme prior to pricing. But Marx was concerned here, I would argue, with the “interpretation” of the source and nature of nonwage income and not with process analysis. The causal linkages of his system, particularly the distribution-pricing nexus, turn out to be identical with those of Ricardo's system. Specifically, the rate of surplus value or “exploitation” (which implies the wage rate) and the profit rate are both treated by Marx as variables (not as data in the analysis of pricing), whose levels are yielded as part of a general-equilibrium solution. There is no way of ruling out the potential effect of changes in the pattern of demand for final goods upon the rate of surplus value and thus upon profits.
The rationale for Marx's precise procedural exposition in Capital is of particular interest. In general terms, Marx operated on the methodological rule that “all science would be superfluous if the outward appearance and the essence of things directly coincided.”49 To have outlined orthodox analysis first would have been handing. hostage to fortune; the ground had to be safely prepared to assure that readers would not draw “erroneous” conclusions from observation of the characteristics of the competitive general-equilibrium system. Marx had in mind primarily the source of profits. He isolated this source in surplus labor time—by which he implied that the capitalist had a “personally functionless role.”50 My main point is, however, that Marx in no way intended a causal dependency of the price scheme upon values.
There is indeed much in Capital regarding the potential consequences of changes in the pattern of final demands. But it would be unjustified to play down Marx's profound conviction that:
‘the social demand,’ i.e., the factor which regulates the principle of demand, is essentially subject to the mutual relationship of the different classes and their respective economic position, notably therefore to, firstly, the ratio of total surplus-value to wages, and secondly, to the relation of the various parts into which the surplus-value is split up (profit, interest, ground-rent, taxes, etc.)
That demand patterns were seen to be essentially governed by income distribution, Marx concluded, meant that “absolutely nothing can be explained by the relation of supply to demand before ascertaining the basis on which this relation rests.”51 The fact, however, that the primary determinants of tastes must be sought in the sphere of income distribution—which, in turn, is subject to constraints imposed by the social, political, and legal environment—in no way removes the necessity of appreciating how the capitalist system accommodates itself to disturbances, should they occur, in commodity or labor markets. To assume otherwise is to imply a totally sterile model. Marx never imposed upon himself so limited a frame of reference, for he did deal explicitly both with the effects of a change in the pattern of final demands (albeit in an incomplete analysis), and with those of a change in the wage rate. The following passage provides further evidence of a far greater degree of flexibility in Marx's vision than is so often attributed to him:
It would seem, then, that there is on the side of demand a certain magnitude of definite social wants which require for their satisfaction a definite quantity of a commodity on the market. But quantitatively, the definite social wants are very elastic and changing. Their fixedness is only apparent. If the means of subsistence were cheaper, or money-wages higher the labourers would buy more of them, and a greater social need would arise for them, leaving aside the paupers, etc., whose ‘demand’ is even below the narrowest limits of their physical wants … The limits within which the need for commodities in the market, the demand, differs quantitatively from the actual social need, naturally vary considerably for different commodities; what I mean is the difference between the demanded quantity of commodities and the quantity which would have been in demand at other money-prices or other money or living conditions of the buyers.52
Marx, on my reading, is a “Ricardian” theorist. By contrast, Sraffa is not. In Ricardo's scheme, re-establishment of an equilibrium system of relative prices following (for example) a variation in wages occurs by way of changes in output (allowing for the condition of equality between quantities demanded and supplied in commodity markets). In Sraffa's model, by contrast, there is no process analysis: re-establishment of equilibrium following a disturbance requires that the condition of profit-rate equality be satisfied, but nothing is said about the mechanism of adjustment; indeed, marginal adjustments are positively ruled out. The condition is, as it were, simply a mathematical prerequisite. Sraffa, unlike Ricardo, thus turned his back on Smithian process analysis. According to process analysis, re-establishment of equilibrium entails reactions by capitalists to profit-rate differentials, and they are manifested in expansions or contractions of the various industries.
We come now to a further fundamental difference between the two structures. Sraffa does not provide a theory of distribution; one of the distributive variables must be given exogenously. However, a brief hint of great interest is given as to the most promising mode of procedure:
The choice of the wage as the independent variable in the preliminary stages [of Sraffa's work] was due to its being there regarded as consisting of specified necessaries determined by the physiological or social conditions which are independent of prices or the rate of profits. But as soon as the possibility of variations in the division of the product is admitted, this consideration loses much of its force. And when the wage is to be regarded as ‘given’ in terms of a more or less abstract standard, and does not acquire a definite meaning until the prices of commodities are determined, the position is reversed. The rate of profits, as a ratio, has a significance which is independent of any prices, and can well be ‘given’ before the prices are fixed. It is accordingly susceptible of being determined from outside the system of production, in particular by the level of the money rates of interest.53
Now, this whole problem does not arise in Ricardo's theory for neither the profit rate nor the wage rate appear as data of his analysis. The wage rate is a variable determined by the general system of demand and supply relationships in the labor market, while the profit rate is merely a formal residual, since there exists a mutual dependency of the one upon the other. In short, Ricardo's model involves the use of something akin to the equilibrium conception of marginalist theory in the context of distribution. This is clearly implied in Ricardo's following statement:
I should think it of little importance whether the profits of stock or the wages of labour, were taxed. By taxing the profits of stock, you would probably alter the rate at which the funds for the maintenance of labour increase, and wages would be disproportioned to the state of that fund, by being too high. By taxing wages, the reward paid to the labourer would also be disproportioned to the state of that fund, by being too low. In the one case, by a fall, and in the other by a rise of money wages, the natural equilibrium between profits and wages would be restored.54
I conclude that Sraffian theory stands apart from the Ricardian tradition.
A careful study of the reception of Ricardo's theorem on distribution shows that a firm and positive impression was left on the work of a number of authors normally regarded as “dissenters” par excellence—including T.R. Malthus, Samuel Bailey, Robert Torrens and Mountifort Longfield. This was the case despite their frequent formal criticisms of Ricardo and his followers and their declared objective to break new ground, or at least to refute the merit of Ricardo's divergencies from the Wealth of Nations.55 It is also clear that the current practice of minimizing the adherence of J.R. McCulloch, J.S. Mill and Thomas De Quincey to Ricardianism—placing them in Smith's camp as far as concerns the theory of value and distribution—is unjustified.
On the whole, the quality of the dissenting literature is disappointing. Much of the work reflects nothing but an unwillingness or inability torecognize different possible meanings of a word when used by different writers, or by the same writer in different contexts. The literature is also replete with sham controversy regarding the “cause” of various phenomena such as rent and values. This reflects, in turn, a failure to distinguish between the data and the variables of a model, and between interdependent, atemporal and nonsequential models and temporal, sequential models.
If substantive matters relating to the fundamental theorem on distribution and its foundation in value theory are isolated, it then becomes clear that there was no rapid decline in Ricardo's authority. His revisions of Smithian theory constituted by and large a “success” in terms of acceptance by his immediate successors.56 These conclusions regarding the longevity of the basic Ricardian theory will appear less surprising than on a first view if we bear in mind that the relativity dimension of value—reflecting the mechanisms of allocative adjustment—played a key role in Ricardian procedure. Ricardo was attempting to correct Smith on the latter's home ground.
My investigation of the reception of Ricardian theory also suggests that many of the contributions of the dissenters would not have been considered objectionable by Ricardo. In many important instances the post-Ricardian critics simply misinterpreted Ricardo. Malthus believed, quite erroneously, that Ricardo maintained his cost theory of exchange value as an alternative to demand-supply theory, and that he had rejected Smith's demand-supply treatment of the labor market. Both Malthus and Longfield asserted, without justification, that in Ricardo's system rising capital with population unchanged leaves the profit rate unaffected—that the only cause of falling profits was resort to inferior land.57 In his famous critique Samuel Bailey made the outrageous charge that Ricardo failed to appreciate the relativity dimension of exchange value.58 Nassau Senior's objection to Ricardo (adopted also by Bailey and T.P. Thompson)—that to say “it is the price of[the] last portion of corn, which governs that of the remainder, is to mistake the effect for the cause”—and his adoption, as an alternative, of a demand-supply or “monopoly” explanation, fall into the same category.59 The fact is that the Ricardians—and to a considerable degree Ricardo himself confirms the point—anticipated much of the substantive argument of the “critics.”
That the Ricardians—even Ricardo himself in the earlier cases—were able to see eye to eye with much of the apparently critical work on value by “dissenters” can be easily accounted for. Ricardo did not envisage his cost of production theory as an alternative to supply-demand analysis. On the other hand, the majority of “dissenters” continued to emphasize the cost determination of price. This is true of Bailey and Longfield, both of whom spoke of production costs as the main consideration in price determination. Longfield's analysis of changes in relative prices emphasized, as did Ricardo, variations of the labor input; and here too was seen to lie the justification of a labor measure.
What, however, of W.F. Lloyd's famous contribution to marginal utility?60 In this context the recent researches of Dr. Marian Bowley are particularly pertinent. As she puts the matter, “no revolutionary significance” was attached to discussions of the law of diminishing marginal utility and related conceptions. Moreover, “these contributions did not affect the main classical conclusions as to the nature of market and natural prices and their determination.”61 This is quite convincing. While Ricardo's main interests lay in long-run price determination, his economics hinged upon the operation of the competitive mechanism involving demand-supply analysis. His rejection of demand-supply theory did not apply to the particular version elaborated by Longfield, and Longfield himself appreciated Ricardo's objections to the “indefinite” and “vague” expression “proportion between the demand and supply” as unhelpful in the prediction of market price.62 Furthermore, Lloyd's analysis of marginal utility is not inconsistent with a cost or even a labor theory, and was not so envisaged by Lloyd himself: “if labour becomes more effective, so that commodities of all kinds shall be produced in a degree of abundance greater in proportion to the wants of mankind, all sorts of commodities, though exchangeable in the same proportions as before for each other, could be said to have become less valuable.”63 This statement is quite consistent with a cost or labor theory of exchange value.
To what extent may the conception of interest as a return to “abstinence” developed by G.P. Scrope, Samuel Read and Nassau Senior be interpreted as a sharp break with Ricardian procedures?64 To what extent would Ricardo have objected to an analysis of the precise nature of the savings supply function? The conception in Ricardo's work of profits as residual is, I believe, little more than a formal consequence of the implicit presumption that the only contractual payment is that made to labor. There can be no doubt that Ricardo recognized the necessity of interest in the limiting case. More importantly, he took into account the effect of a declining profit rate on accumulation. It is true that he gave no name to the effect, but it is by no means certain that he would have objected to the investigation of the time preference notion that the so-called “dissenters” insisted upon. John Stuart Mill found no difficulty in subscribing at one and the same time to the inverse wage-profit relationship and to the abstinence conception.
It is true that as one illustration of what he called Mill's “eclectic syncretism” Marx referred to the fact that Mill “accepts on the one hand Ricardo's theory of profit, and annexes on the other Senior's ‘remuneration of abstinence.’ He is as much at home in absurd contraditions as he feels at sea in the Hegelian contradiction, the source of all dialectic.”65 But there does not appear to be good reason in logic to avoid the simultaneous adoption of a concept of profit envisaged as a formal residual arising from surplus labor time, and the abstinence theory; the one is the basis for investment demand, while the other relates to capital-supply conditions and contributes therefore to the actual determination of surplus labor time. Marx did not succeed in his fundamental objective to demonstrate, by his preliminary formulation in Capital of a value structure, that the capitalist has a personally functionless role.
What, finally, of the widespread application of market demand-supply analysis to long-run wage determination, as for example by Malthus, Longfield, Torrens, Read, Scrope and Senior? Here, too, there occurred no break-away. The story would be a different one were it the case, as is apparently quite generally believed, that the subsistence wage played a key role in Ricardo's work, not only in the context of his growth model but also in basic applications such as wage taxation. But this is far from an accurate perspective. Ricardo's model was a growth model in the true sense—with wages and profits above their respective minima, which become relevant only in the stationary state.
It was Marx's position, as we have mentioned, that while the labor writers of the 1820s drew upon Ricardo's value theory to reach their conclusion regarding labor's right to the whole produce, they rejected these elements of the Ricardian structure that allowed a positive role to capital. Now, the record suggests that the first part of the argument—at least as far as concerns the works of Piercy Ravenstone, William Thompson and Thomas Hodgskin (the best known of the labor writers of the decade in question)—cannot be substantiated at all: they made no use whatever of Ricardo's labor theory.66 Hodgskin (unlike the others) did, however, use other aspects of the doctrine—the inverse profit-wage relation, the subsistence wage and the differential rent conception. But his usage, it can be shown, was an ironical one; he himself was unconvinced by their merit. There is more to the second strand to Marx's case—the socialist critique of the positive role attributed to capital by Ricardo. Yet Marx understates the strength of the “socialist” objections. The fact is that it is difficult to imagine a stronger critic of Ricardianism than Hodgskin. He condemned it as an apologia for the institutional status quo—a defense of the capitalist as well as landlord. He read it as a justification for the contemporary distribution of income; and on his reading, it failed to bring to light class conflicts. Last, he rejected its pessimistic underpinnings even as characteristic of contemporary society. Hodgskin's opposition is quite evident despite the formal use that he made on occasion of aspects of Ricardian theory.
The vehement anti-Ricardianism of the labor writers—particularly Hodgskin—makes it very difficult to believe that the dissenters could have reacted against a dangerous use of the orthodox doctrine for socialistic ends. We must not, of course, entirely rely upon circumstantial evidence, particularly in the light of passages that, taken in isolation, indicate a dependence on certain Ricardian conceptions (though positively not Ricardian value theory). It is always possible that the dissenters failed to recognize the hostility towards Ricardian doctrine on the part of the labor writers. I can, however, find no evidence that any link was defined such as that specified by the Marxian historians.67 The position that labor is responsible for all wealth was attributed by Samuel Read to Ricardo, Smith and Hodgskin. But, while Smith was treated less harshly than either Hodgskin or Ricardo, no relationship whatsoever is drawn between the latter two, who are treated apart. G. Poullet Scrope included Malthus in his list of culprits as well as Smith, Ricardo, and Hodgskin. Richard Whately directed his critical attention at McCulloch and James Mill for their reduction of capital to accumulated labor and their opinion that “time is a mere word,” but neither he nor Scrope linked the socialists with Ricardian theory. Mountifort Longfield, who also alluded to Hodgskin, also does not suggest any such connection. To the extent that the dissenters believed that Ricardo's analysis of value (particularly as interpreted by McCulloch and James Mill) justified the notion of interest as an “exploitation” income, their objections did not follow from any dangerous use that they believed the socialists were making of the theory.
The notion of class hostility providing a handle for the anarchists, supposedly engendered by Ricardo's theory, was, however, a central complaint of one of the most faithful of Ricardo's followers—Thomas De Quincey. Writing in the Logic of Political Economy, not of value theory or the inverse wage-profit theorem, but of Ricardo's minimization of technological progress and the consequent emphasis upon continuously rising rent, De Quincey complained:
And it happens (though certainly not with any intentional sanction from so upright a man as David Ricardo) that in no instance has the policy of gloomy disorganising Jacobinism, fitfully reviving from age to age, received any essential aid from science, excepting in this one painful corollary from Ricardo's triad of chapters on Rent, Profit and Wages … . The class of landlords, they urge, is the merest realisation of a scriptural idea—unjust men reaping where they have not sown. They prosper … by the ruin of the fraternal classes associated with themselves on the land … . The noblest order of men amongst us, our landed aristocracy, is treated as the essential scourge of all orders beside.68
The supposed connection did not lead De Quincey to seek for an alternative structure.
I come now to a feature of the record that on first sight may seem an extraordinary paradox. Scrope—the first of the abstinence writers—was fundamentally opposed to Ricardianism because that doctrine, he believed, lent itself to social apologetics and this, in part, because of its neglect of the implications of income distribution for social welfare. (The same can be said of Read.) Scrope, in short, was a reformer who saw in orthodox doctrine a rock upon which proposals for social improvement must inevitably be destroyed. The parallels between Scrope and William Thompson, in their attitudes to Ricardo, are quite remarkable. Longfield, too, adopted for his time an exceptionally progressive position.69 To this extent Marx's interpretation seems to be the exact reverse of the actual course of events.
My reading also has clear implications for an interpretation of the bourgeois dissent that is subtly different from that which turned on the use made of Ricardo's theory by the labor writers. It is the argument, sometimes offered as an alternative and sometimes as an additional consideration, that the bourgeois economists found the Ricardian doctrine unable to serve as a convincing reply to the labor writers. As Meek formulated the proposition: Scrope, Read and Longfield “tended towards the idea that if a doctrine ‘inculcated pernicious principles,’ if it denied that wealth under free competition was consigned to its ‘proper’ owners, or if it could be so interpreted as to impugn the motives or capacity of the Almighty, then that doctrine must necessarily be false.”70 Now, in considering this matter we must ask to what end did the dissenters seek to reply to the labor writers? It was positively not to the end of justifying contemporary capitalism, as is implied by the hypothesis. Provided that this fundamental correction of the record is recognized, we may allow that several major dissenters expressed their dissatisfaction with specific aspects of Ricardianism, in particular, with its supposed implications regarding class conflict and its supposed “pessimism.”71
The record is a complex one indeed. We must make allowance for the fact that Longfield cannot be classified as a thoroughgoing opponent of Ricardo. He retained enough of the Ricardian framework for it to be more accurate to say that he actually used the orthodox doctrine in making his reply to the radicals; and this he did partly by interpreting it in a manner that avoided the criticism that it portrayed a picture of class warfare, and partly by his analytical innovations.
James Mill should also be kept in mind. His loyalty to Ricardo has never been questioned, but his hysterical response to Hodgskin was sharper than that of any of the dissenters. Mill evidently did not believe that the standard Ricardian position failed to provide an adequate response to the radical challenge; and he saw nothing in that position—even in the labor theory as interpreted by himself—that served the purposes of the socialists. The episode in question commences with Mill's complaint to Francis Place about a working-class deputation to the editor of the Morning Chronicle:
Their notions about property look ugly; they not only desire that it should have nothing to do with representation, which is true, though not a truth for the present time, as they ought to see, but they seem to think that it should not exist, and that the existence of it is an evil to them. Rascals, I have no doubt, are at work among them … . The fools, not to see that what they madly desire would be such a calamity to them as no hands but their own could bring upon them.72
It was Hodgskin's Labour Defended, Place explained to Mill, which the laborers were preaching. In the following year Mill informed Brougham:
The nonsense to which your Lordship alludes about the rights of the labourer to the whole produce of the country, wages, profits and rent, all included, is the mad nonsense of our friend Hodgskin which he has published as a system, and propagates with the zeal of perfect fanaticism … . These opinions, if they were to spread, would be the subversion of civilized society; worse than the revolutionary deluge of Huns and Tartars.73
Clearly there is no self-evident relationship between a body of economic theory and the social attitudes of the economist subscribing to it. All the evidence so far presented points to this conclusion. I close my argument by observing that the existence of positive contributions to theory on the part of some of the labor writers carries the same implication. This is very apparent in Thompson's case. His discussion of value involves an impressive number of “non-Ricardian” features. For example, the conceptions of differential land use, alternative cost, and scarcity value are discussed. He defines and uses the principle of diminishing marginal utility together with the principle of increasing marginal disutility of effort, in an attempt to define an equilibrium wage rate. It is also used in calculating the efforts of income redistribution.74 The significance of free exchange is clearly expressed in utility terms: “All voluntary exchanges of the articles of wealth, implying a preference, on both sides, of the things received to the thing given, tend to increase the happiness from wealth, and thence to increase the motives to its production.”75 While labor is said to be the sole measure of value, it is not an accurate measure in the light of changes in preference patterns over time. This leads Thompson to conclude that to seek an accurate measure of wealth is “to hunt after a shadow”76 —as clear-cut a criticism as any by Bailey. In Hodgskin's case, what stands out is his emphasis upon synchronized activity. In an Economist review of 1854, this is elaborated in terms of the mutual exchange of valuable services.77 These conceptions, when found in the dissenting literature, are often seen as indicating, in some sense, an apologetic justification of free-enterprise capitalism.
Full citations for works listed in the Footnotes may be found in the Bibliography.
[1.]J.A. Schumpeter, History of Economic Analysis. Schumpeter's position is much the same, in its essentials, as that of F.H. Knight, On the History and Method of Economics, pp. 37–88.
[2.]Knight, History and Method of Economics, p. 41. Cf. Schumpeter, History of Economic Analysis, p. 568: while “Professor Knight went perhaps too far if he accused Ricardo of not having seen the problem of distribution as a problem of valuation at all … it is true that Ricardo failed to see the explanatory principle offered by the valuation aspect.” Cf. p. 543n.: “The full implications of the fact that capitalist distribution is a value phenomenon are not clearly seen even by Ricardo.”
[3.]Schumpeter, History of Economic Analysis, p. 569.
[4.]Schumpeter, History, p. 680n., pp. 589–90, p. 568. See also Schumpeter, Economic Doctrine and Method, pp. 196–7; and Knight, p. 40.
[5.]Schumpeter, History of Economic Analysis, pp. 600–1. See also p. 592.
[6.]Schumpeter, History, p. 474; cf. p. 568, p. 673n. See also p. 560: the rejection of the labor-quantity theory by the non-Ricardians and anti-Ricardians of the 1830s, Schumpeter contends, “shows again that the Ricardian teaching was really in the nature of a detour.” Keynes too implied that Ricardianism constituted a “detour” (although his position is limited to the issue of aggregative demand and falls therefore into an entirely separate category): “One cannot rise from a perusal of [the Malthus-Ricardo] correspondence without a feeling that the almost total obliteration of Malthus' line of approach and the complete domination of Ricardo's for a period of a hundred years has been a disaster to the progress of economics.” Essays in Biography, pp. 140–1.
[7.]Schumpeter, History of Economic Analysis, p. 465.
[8.]Schumpeter, History, p. 918.
[9.]Maurice Dobb, Theories of Value and Distribution Since Adam Smith, 44f., p. 112f. Cf., R.L. Meek, “Value in the History of Economic Thought,” History of Political Economy 6 (Fall 1974): pp. 250–1.
[10.]Dobb, Theories of Value, p. 115; cf. Meek, “Value in the History of Economic Thought,” p. 250.
[11.]Dobb, Theories, pp. 115–6.
[12.]Cf. Dobb, Theories, p. 35: “income-distribution (e.g. the profit-wage rate) was a pre-condition of the formation of relative prices.” See also p. 169, p. 261, p. 266.
[13.]Luigi L. Pasinetti, Growth and Income Distribution: Essays in Economic Theory, pp. 43–4. See also Alessandro Roncaglia, Sraffa and the Theory of Prices, p. 119f; Dobb, Theories of Value, p. 261.
[14.]Editor's Introduction, Works and Correspondence of David Ricardo, ed. Piero Sraffa (Cambridge, 1951–1973), I, xxxi. Recall that “corn” refers to what we today call “grain.”
[15.]Luigi L. Pasinetti, Growth and Income Distribution, p. 2.
[16.]The profit rate (r)= f' (ṋI) – 1; where x is the given corn wage and f' (ṋI) the marginal product of labor in corn production. Obviously, as the marginal product of labor rises or falls, the profit rate (r) rises or falls because the corn wage is assumed to be fixed.
[17.]See the Biographical Note by D.M. Nuti in V.K. Dinitriev, Economic Essays on Value, Competition and Utility, pp. 29–32.
[18.]Cf. Léon Walras, Elements of Pure Economics, pp. 424–51: “It is clear … that the English economists are completely baffled by the problem of price determination; for it is impossible for [interest charges] to determine [price] at the same time that [price] determines [interest charges]. In the language of mathematics one equation cannot be used to determine two unknowns.”
[19.]Alfredo Medio, “Profits and Surplus-Value: Appearance and Reality in Capitalist Production,” in E.K. Hunt and J.G. Schwartz, A Critique of Economic Theory, pp. 330–1.
[20.]Medio, pp. 340–1.
[21.]Dobb, Theories of Value, p. 148. There is some ambiguity attached to this kind of conception for it is not always clear whether temporal priority or causal priority or both are intended by the “prior” solution to distribution. But in at least one important formulation temporal as well as causal priority is explicity attributed both to Ricardo and Marx. Cf. R. V. Eagly, The Structure of Classical Economic Theory.
[22.]Roncaglia, Sraffa and the Theory of Prices, p. xvii, p. 117, p. 98.
[23.]Roncaglia, pp. 16–7, p. 98, p. 32.
[24.]Schumpeter, History of Economic Analysis, p. 478.
[25.]See also F.W. Fetter, “The Rise and Decline of Ricardian Economics,” History of Political Economy 1 (Spring 1969). As explained above, Schumpeter considers this procedure to be in conflict with “general equilibrium” analysis; I do not.
[26.]D.P. O'Brien, J.R. McCulloch: A Study in Classical Economics, pp. 402–3. The treatment of the invariable measure of value, which is said to be “central to Ricardo's system,” we are told “never interested McCulloch at all.” (O'Brien, p. 146).
[27.]P.W. Groenewegen, Economic Journal 83 (March 1973): 193.
[28.]Schumpeter, History of Economic Analysis, p. 529.
[29.]Grundrisse: Foundations of the Critique of Political Economy (1857), p. 883.
[30.]Dobb, Theories of Value, p. 122. But see the position of Pedro Schwartz, The New Political Economy of John Stuart Mill, pp. 16–7 which places Mill more firmly in the Ricardian tradition at least as far as concerns analysis.
[31.]Marx, Theories of Surplus Value, III, p. 238.
[32.]Marx, Theories, p. 260.
[33.]Marx, Theories, p. 266. That the roots of British socialism are to be traced to Ricardo's economics was later urged in Anton Menger's The Right to the Whole Produce of Labour and by H.S. Foxwell in his Introduction to that work: “Whatever qualifications Ricardo may have made in his own mind, ninety-nine readers out of a hundred took him literally, and the main impression left by his book was that while wealth was almost exclusively due to labour, it was mainly absorbed by rent and other payments to the unproductive classes.” (H.S. Foxwell, “Introduction” to Anton Menger, The Right to the Whole Produce of Labour, pp. xl-xlii).
[34.]There is an extensive literature adopting this perspective. Élie Halévy, Thomas Hodgskin, pp. 180–1 emphasizes the opposition of the socialists to the Ricardians but at the same time insists upon their dependency on Ricardo's value theory: “the democratic opponents of James Mill and McCulloch, the first working-class theorists, instead of attacking the Ricardian theory of value seized upon its principles to draw from it new conclusions and to refute, by a form of reductio ad absurdam, Ricardo's political economy.” See also Halévy, The Growth of Philosophic Radicalism, pp. 223–4: William Thompson (and Hodgskin) “draw inspiration” from Ricardo.
Similarly, G.D.H. Cole refers to Hodgskin's work as the “working-class answer” to Malthus and Ricardo, and to his “critique of the orthodox economics of Ricardo and his school.” (See Cole's Introduction to Thomas Hodgskin, Labour Defended Against the Claims of Capital, pp. 10–11.) But he also writes, regarding both Hodgskin and Thompson, of their “deductions from Ricardian assumptions” and their “inversion of the Ricardian economic system … [in] essence, their deductions from Ricardian assumptions are the same.” As Hodgskin argues in his book, “if it is admitted—and Ricardo admits it—that labour is the source of all value, then clearly all value belongs to the labourer, who should receive the whole product of his work.” (Cole, p. 12). See also Cole, A History of Socialist Thought, I, p. 106.
Max Beer, A History of British Socialism, I, p. 154, draws the relationship in these terms: “But at the same time the socialists appeared and began to make use of the Ricardian theory of value as a weapon against the middle classes and to teach Labour that not the Tory landowner but the Liberal capitalist was their real enemy. Ricardo made labour the corner-stone of his system and yet he permitted the capitalist to appropriate accumulated labour and to decide the fate of the working classes.”
[35.]Marx, Theories of Surplus Value, III, p. 501.
[36.]Afterword to the second German edition (1873) of Marx's Capital, vol. I, p. 15.
[37.]Meek considers Ricardian theory narrowly defined in terms of the labor theory of value and the related conception that profits depend upon “the proportion of the annual labour of the country … devoted to the support of the labourers,” or upon the quantity of labor allocated to the wage-goods sector relative to the labor force as a whole; and also other supposed standard doctrines involving future prospects and class relationships. Cf. R.L. Meek, Economics and Ideology, pp. 62, 67, 72–3.
[38.]Meek, Economics and Ideology, pp. 68–9, 70, 72. For much the same general approach see also Meek, “Marginalism and Marxism,” History of Political Economy 4 (Fall 1972):500–1, and Meek, Studies in the Labour Theory of Value, pp. 124–5 where “the persistent rejection or dilution of the labor theory by so many economists during the late 1820s and the 1830s,” is attributed to the “use (or misuse) of classical value theory by the British radical writers.”
[39.]S. Hollander, The Economics of David Ricardo.
[40.]On this matter see John Hicks and S. Hollander, “Mr. Ricardo and the Moderns,” Quarterly Journal of Economics 91 (August 1977):351–69.
[41.]Ricardo, Works and Correspondence, I, p.118 (Sraffa ed.).
[42.]Ricardo, Works, II, p. 179 (Sraffa ed.). See also I, p. 388, p. 392, and Ricardo's letter to Malthus of 11 October 1816 (Sraffa ed.) VII, 78: “… it is probable”—not certain—“that with facility of production, or cheap food and necessaries, profits would rise.”
[43.]Ricardo, Works, I, p. 343. (Sraffa ed.) See also pp. 305–6: “the money wages of labour sometimes do not rise at all, and never rise in proportion to the rise in the money price of corn, which though an important part, is only a part of the consumption of the labourer.”
[44.]See Section I and note 18 above.
[45.]A. Marshall, Principles of Economics, pp. 818–9. According to Jevons, “Cost determines supply; Supply determines final degree of utility; Final degree of utility determines value.” Theory of Political Economy, p. 165.
[46.]Marshall, Principles, p. 821n. See also Marshall, p. xxxiii regarding Ricardo's doctrine which (“though obscurely expressed”) “anticipated more of the modern doctrine of the relations between cost, utility and value, than has been recognized by Jevons and some other critics.” See too Marshall, p. 101n. regarding Walras: “His success was aided even by his faults. For under the honest belief that Ricardo and his followers had rendered their account of the causes that determine value hopelessly wrong by omitting to lay stress on the law of satiable wants, he led many to think he was correcting great errors; whereas he was really only adding very important explanations.”
[47.]But see H.M. Robertson, “The Ricardo Problem,” South African Journal of Economics 25 (September 1957): esp. pp. 179f.
[48.]Cf. also a similar conclusion by Mark Blaug, “Kuhn Versus Lakatos, or Paradigms versus Research Programmes in the History of Economics,” History of Political Economy 7 (Winter 1975):416–7.
[49.]Marx, Capital, III, p. 797.
[50.]A felicitous term by Thomas Sowell, “Marx's Capital After One Hundred Years” Canadian Journal of Economics and Political Science 33 (February 1967):71.
[51.]Marx, Capital, III, p. 178. Cf. also Capital, p. 191:
“… it requires an insight into the over-all structure of the capitalist production process for an understanding of the supply and demand created among themselves by producers as such.”
[52.]Marx, Capital, pp. 184–5.
[53.]Sraffa, Production of Commodities, p. 33.
[54.]Ricardo, Works and Correspondence, I, p. 226 [Sraffa's ed., (my emphasis)].
[55.]See my article, S. Hollander, “The Reception of Ricardian Economics,” Oxford Economic Papers 20 (July 1977):221–57.
[56.]See, for this terminological usage, George J. Stigler, “The Successes and Failures of Professor Smith,” Journal of Political Economy 84 (November 1976):1199–1213. It should be emphasized that we have been concerned with “success” insofar as concerns “professionals” in economics rather than simply “educated gentlemen.” For evidence that M.P.s frequently rejected the idea of a necessary opposition between wages and profits see Barry Gordon, Political Economy in Parliament, 1819–1823. There is a further problem here that the inverse wage-profit relationship as interpreted by Ricardo does not represent a necessary opposition between labor and capital; allowance must be made for misinterpretation.
[57.]Malthus, Principles of Political Economy, 1st ed. (1820), 2nd ed. (1836); on Longfield, see his Lectures on Political Economy (1834) in The Economic Writings of Mountifort Longfield (New York, 1971).
[58.]S. Bailey, A Critical Dissertation on the Nature, Measure and Causes of Value (London, 1825).
[59.]Nassau W. Senior, “Report on the State of Agriculture,” Quarterly Review 25, no. 50 (July 1821); T. Perronet Thompson, The True Theory of Rent in Opposition to Mr. Ricardo and Others (London, 1826), 9th edition (1832).
[60.]W.F. Lloyd, A Lecture on the Notion of Value (London, 1834).
[61.]M. Bowley, “The Predecessors of Jevons: The Revolution that Wasn't,” The Manchester School 40 (March 1972):27.
[62.]M. Longfield, Lectures on Political Economy, p. 247.
[63.]M. Longfield, Lecture on the Notion of Value, p. 28.
[64.]G. Poulett Scrope, “The Political Economists,” Quarterly Review 44, No. 87 (Jan. 1831); and Principles of Political Economy derived from the Natural Laws of Social Welfare (London, 1833). Samuel Read, Political Economy: An Inquiry into the Natural Grounds of a Right to Vendible Property or Wealth (Edinburgh, 1829); Nassau Senior, An Outline of the Science of Political Economy (London, 1836).
[65.]Marx, Capital, I, p. 596n.
[66.]Cf. the evidence presented by Professor P.H. Douglas which demonstrates that the impetus to early nineteenth-century British socialism deriving from the conception of profits and rent as “deductions from the whole produce of labour” came from the writings of Adam Smith rather than those of Ricardo. “Smith's Theory of Value and Distribution,” in J.M. Clark, Adam Smith, 1776–1926, p. 95f.
A similar account is given by Mark Blaug, Ricardian Economics, p. 148; but see Blaug, p. 143. “Unlike Gray and Thompson, who show no signs of having read Ricardo, Hodgskin derived his exploitation theory of profit directly from Ricardo's version of the profit labour theory of value.”
In her well-known monograph on the subject Esther Lowenthal questioned the legitimacy of the designation “Ricardian” socialism: “although … the socialist use of the labour theory followed hard on the publication of Ricardo's Principles, there is no evidence that the socialists were particularly impressed by his teachings. They, all of them, quote Adam Smith as their authority for the labor theory of value … and only Hodgskin betrays an intimate knowledge of [Ricardo's] work.” (The Ricardian Socialists, p. 103). But Ms. Lowenthal also asserts that Hodgskin attacks the claims of capital on the basis of the labor theory of value and “bases very explicitly on Ricardo's system of economics” his position that “since labour produces all value, labour should obtain all value.” (Lowenthal, pp. 73, 74–5).
See also Schumpeter, History of Economic Analysis, p. 479, regarding the notion that labor is the only factor of production: “Though this proposition harks back to Locke and Smith and not to Ricardo, it is likely that the Ricardian theory of value did encourage these socialist writers and also offered suggestions to them.”
[67.]For a position close to my own see T.W. Hutchison, On Revolution and Progress in Economic Knowledge, p. 240f. While Professor E.K. Hunt has recently demonstrated Hodgskin's reaction against Ricardian value theory, he nonetheless accepts Meek's general position regarding the motive for the bourgeois reaction on the grounds that “most of Hodgskin's contemporaries … were quick to recognize that Ricardo's labour theory of value led quite naturally to Hodgskin's theory of capital. And this undoubtedly contributed to the conservative reaction of the 1820's against Ricardo's value theory.” See E.K. Hunt, “Value Theory in the Writings of the Classical Economists, Thomas Hodgskin, and Karl Marx,” History of Political Ecoiomy 9 (Fall 1977):345.
[68.]Thomas De Quincey, The Logic of Political Economy (1844) in David Masson ed. Political Economy and Politics, pp. 250–1. J.S. Mill, in his review (Collected Works of J.S. Mill, IV, pp. 403–4) complained of De Quincey's “ultra-Tory prejudices which deformed his work, and which were particularly regretable since he was so sound on economic theory.” Mill had in mind largely De Quincey's support for the corn laws.
[69.]By contrast “the practical outcome of Hodgskin's inquiry seems tame, and, as often happens with anarchist essays hardly in keeping with the pretensions of the critical part of the work.” Foxwell, in his “Introduction” to Anton Menger, The Right to the Whole Produce of Labour, p. lxiv. On the nature of Hodgskin's own reform program—more precisely its absence—see also Halévy, Thomas Hodgskin, pp. 125–6.
[70.]Meek, Economics and Ideology, p. 71. See also Mark Blaug, Ricardian Economics, p. 149; L.S. Moss, “Isaac Butt and The Early Development of the Marginal Utility Theory of Imputation,” History of Political Economy 5 (Fall 1973):325; and M. Dobb, Theories of Value and Distribution Since Adam Smith, p. 110.
[71.]The economists sometimes had to prove their moral and religious bona fides and reconcile economics with Christianity to gain entry into the universities. See L.S. Moss, Mountifort Longfield: Ireland's First Professor of Political Economy, pp. 14–5. Also see S.G. Checkland, “The Advent of Academic Economics in England,” The Manchester School of Economic and Social Studies (January 1951):52. But, it should be noted that the labor writers expressed themselves in much the same language. Rejecting the Malthusian principle, Hodgskin proclaimed that “moral feelings and scientific truth must always be in harmony with each other,” Popular Political Economy, (London, 1827), pp. xxi-xxii. Hodgskin's book ends on the same theme: “… the science of Political Economy” will be found when perfectly known to “Justify the ways of God to man.”
[72.]James Mill's Letter of 25 October, 1831 cited by Graham Wallas, The Life of Francis Place, p. 274n.
[73.]James Mill's Letter of September 3, 1832, also in Wallas.
[74.]William Thompson, Distribution of Wealth, pp. 71–3.
[75.]Thompson, p. 45
[76.]Thompson, p. 15.
[77.]Hodgskin, The Economist 12 (18 November 1854):1270.
Leonard P. Liggio, Literature of Liberty: A Review of Contemporary Liberal Thought was published first by the Cato Institute (1978-1979) and later by the Institute for Humane Studies (1980-1982) under the editorial direction of Leonard P. Liggio. Chapter: Editorial
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David Ricardo (1772–1823) made an unexpected contribution to liberty. A successful broker in government bonds, always interested in intellectual and scientific studies, but unaccustomed to research and writing, Ricardo's essays and books were an advancement of liberty which could not have been predicted. Once published, Ricardo's thought became one of the foundations for nineteenth century intellectual activity. Joseph Schumpeter believed that Ricardo, building on Richard Cantillon and Adam Smith, had created an impressive instrument of analysis. Ricardo felt that he had drawn from the contributions of Turgot, Stewart, Smith, Say, Sismondi “and others” (History of Economic Analysis, New York, Oxford University Press, 1954). Among the others were Thomas Malthus and James Mill.
Thomas Malthus and Ricardo were acquainted for a dozen years, yet they were in fundamental disagreement on methodology (cf. Robert Ekelund and Robert Hebert, A History of Economic Theory and Method, New York, McGraw-Hill, 1975). Similarly, Malthus's emphasis on insufficient aggregate demand (underconsumption theory) was contrary to one of the central principles of economics, Say's Law of Markets. By contrast, James Mill and Ricardo enjoyed an identity of method and principles. Mill persuaded Ricardo to read such major thinkers as John Locke, David Hume, and John Millar (Adam Smith's pupil) and to write his major works in political economy. Mill himself had been a student in Edinburgh of the Smithian Dugald Stewart, and transmitted Stewart's approach to Ricardo. Ricardo felt himself a member of the liberal school of Bentham and Mill, and acted in public as a practical spokesman for that school after he entered parliament for an Irish borough in 1819 (cf. Elie Halévy, The Growth of Philosophical Radicalism. Part III. London, Faber and Faber, 1928).
During David Ricardo's lifetime England experienced the completion of the wrenching transformation from an agricultural to a growing industrial society—the Industrial Revolution. Much anxiety was expressed whether the country could sustain over time the level of prosperity which industrial growth was providing. Ricardo's writing sought to provide correct answers from political economy to these problems. In addition, the almost quarter century of war placed a great strain on English society. Taxation and government loans siphoned off huge amounts of monies that otherwise would have gone into productive investments: the small householder was compelled to pay taxes and the great financier was lured to invest in government securities rather than industry. The government's recourse to indirect taxation through the inflationary issuing of paper money created still further economic dislocation.
Indeed, addressing these dislocations, Ricardo's earliest economic contributions in 1809 (Three Letters on the Price of Gold) were critiques of inflation and paper money. As one of the most successful, and shrewdest men in the money market, Ricardo brought to the subject detailed knowledge of the nature of money and the consequences of government intervention in money through central bank expansion of money. His rigorous objections to paper money systems laid the foundation for sound monetary policy for a century. Today, a half century of disquieting experience with the volatile monetary system has reawakened interest in the economic principles Ricardo espoused.
∗ ∗ ∗
Sir Herbert Butterfield died in late July, 1979. Sir Herbert, long a pre-eminent expositor of the history of ideas and of historiography, especially in diplomatic history, exerted a major influence on Anglo-American scholarship. At Cambridge University Butterfield created the groundwork for historical research free of the bias in favor of government policies (cf. “Official History,” Kenneth S. Templeton, Jr., ed., The Politicization of Society, Indianapolis, Liberty Press, 1979). Butterfield sensed in the modern state and its historians a reversion to a new type of paganism which assumed “the primeval thesis: ‘We are the righteous ones and the enemy are wicked’.” From his perspective “official history” imagined that:
masses of men on the one side have freely opted for wickedness, while on the other side there is a completely righteous party, whose virtue is superior to conditioning circumstances. The reasons for suspecting such a diagram of the situation are greatly multiplied if the ethical judgement is entangled with a political one—if, for example, the wickedness is charged against a rival political party, or imputed to another nation just at the moment when, for reasons of poor politics, that nation is due to stand as the potential enemy in any case.
Sir Herbert was kind enough to write favorably about Literature of Liberty; unfortunately, his death prevented his writing a bibliographical essay on Lord Acton for the Literature of Liberty. For an intimation of his approach to Acton, one might wish to consult his Lord Acton (Historical Association General Series, 9, 1948) and “Acton: His Training, Methods and Intellectual System,” (in A.O. Sarkissian, ed., Studies in Diplomatic History and Historiography, London: Longmans, 1961). A starting point for appreciating Sir Herbert's own historical contributions to the study of liberty would be William J. McGill's “Herbert Butterfield and the Idea of Liberty,” The South Atlantic Quarterly 70 (Winter 1971): pp. 1–12.
John Ramsay McCulloch, Treatises and Essays on Subjects connected with Economic Policy with Biographical Sketches of Quesnay, Adam Smith & Ricardo (Edinburgh: Adam and Charles Black, 1853). Chapter: SKETCH OF THE LIFE AND WRITINGS OF DAVID RICARDO, ESQ., M.P.
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The text is in the public domain.
Mr Ricardo was placed, in early life, under circumstances apparently the least favourable for the formation of those habits of patient and comprehensive investigation, which afterwards raised him to a high rank among political philosophers.
He was the third of a numerous family, and was born on the 19th of April 1772. His father, a native of Holland, and of the Jewish persuasion, settled in this country early in life. He is said to have been a man of good talents, and of the strictest integrity; and, having become a member of the Stock Exchange, he acquired a respectable fortune, and possessed considerable influence in his circle. David, the subject of the present memoir, was destined for the same line of business as his father; and received, partly in England, and partly at a school in Holland, where he resided two years, such an education as is usually given to young men intended for the mercantile profession. Classical learning formed no part of his early instruction; and it has been questioned, with how much justice we shall not undertake to decide, whether its acquisition would have done him service; and whether it might not probably have made him seek for relaxation in the study of elegant literature, rather than in the severer exercises of the understanding, and prompted him to adopt opinions sanctioned by authority, without inquiring very anxiously into the grounds on which they rested.
Mr Ricardo began to be confidentially employed by his father in the business of the Stock Exchange when he was only fourteen years of age. Neither then, however, nor at any subsequent period, was he wholly engrossed by the details of his profession. From his earliest years he evinced a taste for abstract reasoning; and manifested that determination to probe every subject of interest to the bottom, and to form his opinion upon it according to the conviction of his mind, which was a distinguishing feature of his character.
Mr Ricardo, senior, had been accustomed to subscribe, without investigation, to the opinions of his ancestors on all questions connected with religion and politics, and he was desirous that his children should do the same. But this system of passive obedience, and of blind submission to the dictates of authority, was quite repugnant to the principles of young Ricardo, who, though he did not fail to testify the sincerest affection and respect for his father, found reason to differ from him on many important points, and even to secede from the Hebrew faith.
Not long after this event, and shortly after he had attained the age of majority, Mr Ricardo formed a matrimonial union, productive of unalloyed domestic happiness. Having been separated from his father, he was now thrown on his own resources, and commenced business for himself. At this important epoch of his history, the oldest and most respectable members of the Stock Exchange gave a striking proof of the esteem entertained by them for his talents and character, by voluntarily coming forward to support him in his undertakings. His success exceeded the most sanguine expectations of his friends; and in a few years he realised an ample fortune.
“The talent for obtaining wealth,” says one of Mr Ricardo’s near relations, from whose account of his life we have borrowed these particulars, “is not held in much estimation; but perhaps in nothing did Mr R. more evince his extraordinary powers than he did in his business. His complete knowledge of all its intricacies,—his surprising quickness at figures and calculation,—his capability of getting through, without any apparent exertion, the immense transactions in which he was concerned,—his coolness and judgment, combined certainly with (for him) a fortunate tissue of public events,—enabled him to leave all his contemporaries at the Stock Exchange far behind, and to raise himself infinitely higher, not only in fortune, but in general character and estimation, than any man had ever done before in that house. Such was the impression which these qualities had made on his competitors, that several of the most discerning among them, long before he had emerged into public notoriety, prognosticated in their admiration that he would live to fill some of the highest stations in the state.”1
According as his solicitude about his success in life declined, Ricardo devoted a greater portion of his time to scientific and literary pursuits. When about twenty-five years of age, he began the study of some branches of mathematical science, and made considerable progress in chemistry and mineralogy. He fitted up a laboratory, formed a collection of minerals, and was one of the original members of the Geological Society. But he never entered warmly into the study of these sciences. They were not adapted to the peculiar cast of his mind; and he abandoned them entirely, as soon as his attention was directed to the more congenial study of Political Economy.
He is stated to have become acquainted, for the first time, with the “Wealth of Nations” in 1799, while on a visit at Bath. He was highly gratified by its perusal; and it is most probable that the inquiries about which it is conversant continued henceforth to engage a considerable share of his attention, though it was not till a later period that his spare time was almost exclusively occupied with their study.
Ricardo made his first appearance as an author in 1809. The rise in the market price of bullion, and the fall of the exchange, which had taken place in the course of that year, excited a good deal of attention. Ricardo applied himself to the consideration of the subject; and the studies in which he had latterly been engaged, combined with the experience he had derived from his moneyed transactions, not only enabled him to perceive the true causes of the phenomena in question, but to trace and exhibit their practical bearing and real effect. He began this investigation without intending to lay the result of his researches before the public. But having shown his manuscript to the late Mr Perry, the proprietor and editor of the “Morning Chronicle,” the latter prevailed upon him, though not without considerable difficulty, to consent to its publication, in the shape of letters, in that journal. The first of these appeared on the 6th of September 1809. They made a considerable impression, and elicited various answers. This success, and the increasing interest of the subject, induced him to commit his opinions upon it to the judgment of the public, in a more enlarged and systematic form, in the tract entitled, “The High Price of Bullion a Proof of the Depreciation of Bank Notes,” which led the way in the far-famed bullion controversy. It issued from the press several months previously to the appointment of the Bullion Committee, and is believed to have had no inconsiderable effect in forwarding that important measure. In this tract Mr Ricardo showed that redundancy and deficiency of currency are only relative terms; and that, so long as the currency of any particular country consists exclusively of gold and silver coins, or of paper immediately convertible into such coins, its value can neither rise above nor fall below the value of the metallic currencies of other countries, by a greater sum than will suffice to defray the expense of importing foreign coin or bullion, if the currency be deficient; or of exporting a portion of the existing supply, if it be redundant. But when a country issues inconvertible paper notes (as was then the case in England), they cannot be exported to other countries in the event of their becoming redundant at home; and whenever, under such circumstances, the exchange with foreign states is depressed below, or the price of bullion rises above, its mint price, more than the cost of sending coin or bullion abroad, it shows conclusively that too much paper has been issued, and that its value is depreciated from excess. The principles which pervade the “Report of the Bullion Committee” are substantially the same with those established by Ricardo in this pamphlet. But the more comprehensive and popular manner in which they are illustrated in the Report, and the circumstance of their being recommended by a committee comprising some of the ablest men in the country, gave them a weight and authority which they could not otherwise have obtained. And though the prejudices and ignorance of some, and the interested, and therefore determined, opposition of others, prevented for a while the adoption of the measures proposed by Ricardo and the committee for restoring the currency to a sound and healthy state, they were afterwards carried into full effect; and afford one of the most memorable examples in our history of the triumph of principle over selfishness, sophistry, and error.
The fourth edition of this tract is the most valuable. An Appendix added to it has some observations on certain disputed questions in the theory of exchange; and it also contains the first germ of the original idea of making bank notes exchangeable for bars of gold bullion.
Among those who entered the lists in opposition to the principles laid down, and the practical measures suggested in this tract, and in the Report of the Bullion Committee, a prominent place is due to Mr Bosanquet. This gentleman had great experience as a merchant; and as he professed that the statements and conclusions embodied in his “Practical Observations,” which are completely at variance with those in the Report, were the result of a careful examination of the theoretical opinions of the Committee by the test of fact and experiment, they were well fitted to make, and did make, a very considerable impression. The triumph of Mr Bosanquet was, however, of very short duration. Mr Ricardo did not hesitate to attack this formidable adversary in his stronghold. His tract, entitled “Reply to Mr Bosanquet’s Practical Observations on the Report of the Bullion Committee,” was published in 1811, and is one of the best essays that has appeared on any disputed question of Political Economy. In this pamphlet, Ricardo met Bosanquet on his own ground, and overthrew him with his own weapons. He examined the proofs which the latter had brought forward, of the pretended discrepancy between the facts stated in his own tract, which he said were consistent with experience, and the theory laid down in the Bullion Report; and showed that Mr Bosanquet had either mistaken the cases by which he proposed to test the theory, or that the discrepancy was apparent only, and was entirely a consequence of his inability to apply the theory, and not of anything erroneous or deficient in it. The victory of Ricardo was perfect and complete; and the elaborate errors and misstatements of Bosanquet served only, in the words of Dr Coppleston, “to illustrate the abilities of the writer who stepped forward to vindicate the truth.”1
This tract affords a striking example of the ascendancy which those who possess a knowledge both of principle and practice, have over those who are familiar only with the latter. And though the interest of the question which led to its publication has subsided, it will always be read with delight by such as are not insensible of the high gratification which all ingenuous minds must feel in observing the ease with which a superior intellect clears away the irrelevant matter with which a question has been designedly embarrassed, reduces false facts to their just value, and traces and exhibits the constant operation of the same general principle through all the mazy intricacies of practical detail.
The merit of these pamphlets was duly appreciated; and Mr Ricardo’s society was, in consequence, courted by men of the first eminence, who were not less pleased with his modesty and unassuming manners, than with the vigour of his understanding. He formed, about this time, an intimacy with Mr Malthus, and Mr Mill, the historian of British India, which ended only with his death. To the latter he was particularly attached, and readily acknowledged how much he owed to his friendship.
Mr Ricardo next appeared as an author in 1815, during the discussions on the bill, afterwards passed into a law, for raising the limit at which foreign corn might be imported for consumption, to 80s. Malthus, and a “Fellow of University College, Oxford” (afterwards Sir Edward West), had, by a curious coincidence, in tracts published almost consentaneously, elucidated the true theory of rent, which, though fully explained by Dr Anderson as early as 1777, appears to have been entirely forgotten. But neither of these gentlemen perceived the bearing of the theory on the question in regard to the restriction of the importation of foreign corn. This was reserved for Ricardo, who, in his “Essay on the Influence of a Low Price of Corn on the Profits of Stock,” showed the effect of an increase in the price of raw produce on wages and profits; and founded a cogent argument in favour of the freedom of the corn trade, on the very grounds on which Malthus had endeavoured to show the propriety of subjecting it to fresh restrictions.
In 1816, Mr Ricardo published his “Proposals for an Economical and Secure Currency, with Observations on the Profits of the Bank of England.” In this pamphlet he examined the circumstances which determine the value of money, when every individual has the power to supply it, and when that power is restricted or placed under a monopoly; and he showed that, in the former case, its value will depend, like that of all other freely supplied articles, on its cost; while, in the latter, it will be unaffected by that circumstance, and will depend on the extent to which it may be issued compared with the demand. This is a principle of great importance; for it shows that intrinsic worth is not necessary to a currency, and that, provided the supply of paper notes, declared to be legal tender, be sufficiently limited, their value may be maintained on a par with the value of gold, or raised to any higher level. If, therefore, it were practicable to devise a plan for preserving the value of paper on a level with that of gold, without making it convertible into coin at the pleasure of the holder, the heavy expense of a metallic currency would be saved. To effect this desirable object, Ricardo proposed that, instead of being made exchangeable for gold coins, bank notes should be made exchangeable for bars of gold bullion of the standard weight and purity. This plan, than which nothing can be more simple, was obviously fitted to check the over-issue of paper quite as effectually as it is checked by making it convertible into coin; while, as bars could not be used as currency, it prevented any gold from getting into circulation, and, consequently, saved the expense of coinage, and the wear and tear and loss of coins. It was recommended by the Committees of the Houses of Lords and Commons appointed, in 1819, to consider the expediency of the Bank of England resuming cash payments; and was adopted in the bill for their resumption introduced by Sir Robert Peel. In practice it was found completely to answer the object of checking over-issue. Inasmuch, however, as it required that the place of sovereigns should be filled with one pound notes, the forgery of the latter began to be extensively carried on. And it was wisely judged better to incur the expense of recurring to and keeping up a mixed currency, than to continue a plan which, though productive of a large saving, held out an all but irresistible temptation to crime.
In 1817, Mr Ricardo published his great work on the “Principles of Political Economy and Taxation.” This was a step which he did not take without much hesitation. He was not, and did not affect to be, insensible of the value of literary and philosophical reputation; but his modesty always led him to undervalue his own powers; and having acquired a high degree of celebrity as a writer on currency, he was unwilling to risk what he already possessed, by attempting to gain more. Ultimately, however, he was prevailed upon, by the entreaties of his friends, to allow his work to be sent to press. Its appearance forms a memorable æra in the history of political science. Exclusive of many valuable subsidiary inquiries, he has pointed out, in this work, the source and limiting principle of exchangeable value, and has traced the laws which determine the distribution of wealth among the various ranks and orders of society. The powers of mind displayed in these investigations, the dexterity with which the most abstruse questions are unravelled, the sagacity displayed in tracing the operation of general principles, in disentangling them from such as are of a secondary and accidental nature, and in perceiving and estimating their remote consequences, have never been surpassed; and will secure the name of Ricardo a permanent place among those who have done most to unfold the mechanism of society, and to discover the circumstances on which the well-being of its various orders must always mainly depend.
The principle, that the exchangeable value of commodities, or their worth as compared with each other, depends on the quantities of labour necessarily required to produce them and bring them to market, is fully established in this work. Adam Smith had shown that this principle determines the value of commodities in the earlier stages of society, before land is appropriated and capital accumulated; but he supposed that, after land has become property and rent begins to be paid, and after capital has been amassed and workmen are hired by capitalists, the value of commodities fluctuates not only according to variations in the labour required to produce and bring them to market, but also according to variations of rents and wages. Ricardo, however, has shown that this theory is erroneous, and that the value of commodities is determined, in all states of society, by the same principle, or by the quantities of labour required for their production. He has shown that variations of profits or wages, by affecting different commodities to the same, or nearly the same extent, would either have no influence over their exchangeable value, or, if they had any, it would depend upon the degree in which they occasionally affect some products more than others. And Dr Anderson and others having already shown that rent is not an element of cost or value, it follows that the cost or value of all freely produced commodities, the supply of which may be indefinitely increased (abstracting from temporary variations of supply and demand), depends wholly on the quantities of labour required for their production, and not upon the rate at which that labour may be paid; so that, supposing the labour required to produce any number of commodities to remain constant, their cost and value will also remain constant, whether wages fall from 3s. to 1s., or rise from 3s. to 5s. or 7s. a-day. This is the fundamental theorem of the science of value, and the clue which unravels the intricate labyrinth of the laws which regulate the distribution of wealth. Its discovery has shed a flood of light on what was previously shrouded in all but impenetrable mystery; and the knotty and formerly insoluble questions regarding the action of wages and profits on each other and on prices, have since ceased to present any insuperable difficulties. What the researches of Locke and Smith did for the production of wealth, those of Ricardo have done for its value and distribution.
The establishment of general principles being Ricardo’s great object, he has paid comparatively little attention to their practical application, and sometimes, indeed, he has in great measure overlooked the circumstances by which they are occasionally countervailed. In illustration of this we may mention, that society being laid under the necessity of constantly resorting to inferior soils to obtain additional supplies of food, he lays it down that, in the progress of society, raw produce and wages have a constant tendency to rise and profits to fall. And this, no doubt, is in the abstract true. But it must at the same time be observed, that if on the one hand society be obliged constantly to resort to inferior soils, agriculture is on the other hand susceptible of indefinite improvement; and this improvement necessarily in so far countervails the decreasing fertility of the soil; and may, and in fact frequently does, more than countervail it. Ricardo has also very generally overlooked the influence of increased prices in diminishing consumption and stimulating industry, so that his conclusions, though true according to his assumptions, do not always harmonise with what really takes place. But his is not a practical work; and it did not enter into his plan to exhibit the circumstances which give rise to the discrepancies in question. The “Principles of Political Economy and Taxation” is not even a systematic treatise, but is principally an inquiry respecting certain fundamental principles, most of which had previously been undiscovered. And though it be often exceedingly difficult, or it may be all but impossible, to estimate the extent to which these principles may in certain cases be modified by other principles and combinations of circumstances, it is obviously of the greatest importance to have ascertained their existence. They are so many land-marks to which to refer, and can never be lost sight of even in matters most essentially practical.
The portion of his work, in which Ricardo traces the incidence of taxes on rent, profit, wages, and raw produce, is more practical than the others; and should be carefully studied by those who wish to make themselves well acquainted with this department of political science.
Mr Ricardo had now become an extensive landed proprietor, and had wholly retired from business, with a fortune acquired with the universal respect and esteem of his competitors. But he did not retire from the bustle of active life, to the mere enjoyment of his acres. Non fuit consilium socordia atque desidia bonum otium conterere. He had other objects in view; and while his leisure hours, when in the country, were chiefly devoted to inquiries connected with that science, of which he was now confessedly at the head, he determined to extend the sphere of his usefulness, by entering the House of Commons. In 1819 he took his seat as member for Portarlington. His diffidence in his own powers had, however, nearly deprived the public of the services which he rendered in this situation. In a letter to one of his friends, dated the 7th of April 1819, he says—“You will have seen that I have taken my seat in the House of Commons. I fear that I shall be of little use there. I have twice attempted to speak; but I proceeded in the most embarrassed manner; and I have no hope of conquering the alarm with which I am assailed the moment I hear the sound of my own voice.” And in a letter to the same gentleman, dated the 22d of June 1819, he says,—“I thank you for your endeavours to inspire me with confidence on the occasion of my addressing the House. Their indulgent reception of me has, in some degree, made the task of speaking more easy to me; but there are yet so many formidable obstacles to my success, and some, I fear, of a nature nearly insurmountable, that I apprehend it will be wisdom and sound discretion in me to content myself with giving silent votes.” Fortunately he did not adopt this resolution. The difficulties with which he had at first to struggle, and his diffidence in himself, gradually subsided; while the mildness of his manners, the mastery which he possessed over the subjects on which he spoke, and the purity of his intentions, speedily secured him a very extensive influence both in the House and the country, and gave great weight to his opinions.
Mr Ricardo was not one of those who make speeches to suit the ephemeral circumstances and politics of the day; he spoke only from principle, and with a fixed resolution never to diverge in any degree from the path which it pointed out; he neither concealed nor modified an opinion for the purpose of conciliating the favour, or of disarming the prejudices or hostility, of any man or set of men; nor did he ever make a speech or give a vote which he was not well convinced was founded on just principles, and calculated to promote the lasting interests of the public. Trained to habits of profound thinking, independent in his fortune, and inflexible in his principles, Ricardo had little in common with mere party politicians. The public good was the grand object of his parliamentary exertions; and he laboured to promote it, not by engaging in party combinations, but by supporting the rights and liberties of all classes, and by unfolding the true sources of national wealth and general prosperity.
The change that has taken place in public opinion respecting the financial and commercial policy of the country, since the period when Ricardo obtained a seat in the House of Commons, is as complete as it is gratifying. Not only are the most enlarged principles advocated by all the leading members of both Houses; not only are they ready to admit that it is sound policy to admit free competition in every branch of industry, and to deal with all the world on a fair and liberal footing; but they have embodied these doctrines in the law of the land, and given them the sanction of parliamentary authority. Sir Robert Peel,1 at a vast personal sacrifice, and despite obstacles which none else could have overcome, carried out and established, in their fullest extent, the principles of commercial freedom developed by Smith and his followers. And that great statesman willingly admitted that the writings and speeches of Ricardo had contributed in no ordinary degree to pave the way for this desirable consummation. As he was known to be a master of economical science, his opinion, from the moment he entered the House of Commons, was referred to on all important occasions.2 And he acquired additional influence and consideration, according as experience served to render the House and the country better acquainted with his talents, and his singleness of purpose.
In 1820, Ricardo contributed an article on the “Funding System,” to the Supplement to the “Encyclopædia Britannica.” This tract, though confused in its arrangement, and in many respects defective, embraces some valuable discussions. He was a decided friend to the plan for raising the supplies for a war within the year, by an equivalent increase of taxation. And he also thought (in which opinion few probably will be disposed to concur) that it would be not only expedient but practicable to pay off the public debt by an assessment on capital.
In 1822, Ricardo published, during the parliamentary discussions on the subject of the corn laws, his tract on “Protection to Agriculture.” This is the best of all his pamphlets, and is, indeed, a chef-d’œuvre. The questions respecting remunerating price, the influence of a low and high value of corn over wages and profits, the influence of taxation over agriculture and manufactures, and many other topics of equal difficulty and interest, are all discussed in the short compass of eighty or ninety pages, with a precision and clearness that leaves nothing to be desired. Had he never written anything else, this pamphlet would have placed Ricardo in the first rank of political economists.
In this tract, Mr Ricardo explained his views in regard to the proposal, which he supported, of opening the ports to the free importation of corn under a fixed duty, accompanied with a nearly corresponding drawback. These he held to be necessary to countervail the peculiar burdens falling on the land, of the existence and pressure of which he had no doubt whatever. Conformably to this principle, he proposed that a duty of 20s. a-quarter should be laid on wheat (and proportionally on other grain), to be diminished by 1s. a-year till it was reduced to 10s., when it should become permanent; and that the accompanying drawback should be 7s. a-quarter. He adds, “10s. is, I am sure, rather too high as a countervailing duty for the peculiar taxes which are imposed on the corn-grower, over and above those which are imposed on the other classes of producers in the country; but I would rather err on the side of a liberal allowance than of a scanty one; and it is for this reason that I do not propose to allow a drawback quite equal to the duty.”1
In farther illustration of this statement, we may mention, that in a letter,2 which the author of this work had the honour to receive from Mr Ricardo, about a year previously to the publication of the tract now referred to, he expressed himself as follows, viz.:—“Your observations on the Report of the Agricultural Committee (of 1821) are excellent. I fought hard against the principle of the first passage which you quote, but without success. Mr Huskisson did not himself quite agree with its correctness. But the difference between him and me is this: he would uphold agriculture permanently up to its present height; I would reduce it gradually to the level at which it would have been if the trade had been free; for I should call the trade free, if wheat were subject to a permanent duty of 8s. a-quarter, to countervail the peculiar taxes to which land is subject.”
There cannot, therefore, be any doubt in regard to Mr Ricardo’s opinion respecting the proper course to be followed in dealing with the late corn laws. Had he lived to take part in the debates in 1846, there is every probability that he would have supported the measures which were then taken for their abolition. But he would not have done this from a conviction that they were really just and fair to all classes, but because, in addition to their being highly expedient in a general point of view, they had become imperatively necessary in the peculiar circumstances under which the failure of the potato crop had placed the country.1
Though not robust, Mr Ricardo’s constitution was apparently good, and his health such as to promise a long life of usefulness. He had, indeed, been subject for several years to an affection in one of his ears; but as it had not given him any serious inconvenience, he paid it but little attention. When he retired to his seat in Gloucestershire (Gatcomb Park), subsequently to the close of the session of 1823, he was in excellent health and spirits; and, besides completing a tract containing a plan for the establishment of a National Bank, he engaged, with his usual ardour, in elaborate inquiries regarding some of the more abstruse economical doctrines. But he was not destined to bring these inquiries to a close! Early in September he was suddenly seized with a violent pain in the diseased ear. The symptoms were not, however, considered unfavourable; and the breaking of an imposthume that had been formed within the ear contributed greatly to his relief. But the amendment was only transitory. Within two days, inflammation recommenced; and, after a period of the greatest agony, pressure on the brain ensued, which produced a stupor, that continued until death terminated his sufferings, on the 11th September, in his fifty-second year.
In private life, Ricardo was most amiable. He was an indulgent father and husband, and an affectionate and zealous friend. No man could be more thoroughly free from every species of artifice and pretension, more sincere, plain, and unassuming. He was particularly fond of assembling intelligent men around him, and of conversing in the most unrestrained manner on all topics of interest, but more especially on those connected with his favourite science. On these, as on all occasions, he readily gave way to others, and never discovered the least impatience to speak; but when he did speak, the solidity of his judgment, his candour, and his extraordinary talent for resolving a question into its elements, and for setting the most difficult and complicated subjects in the clearest light, arrested the attention of every one, and delighted all who heard him. He never entered into an argument, whether in public or private, for the sake of displaying ingenuity, baffling an opponent, or gaining a victory. The discovery of truth was his exclusive object. He was ever open to conviction. And if he were satisfied he had either advanced or supported an erroneous opinion, he was the first to acknowledge his error, and to caution others against it.
Few men have possessed in a higher degree than Mr Ricardo, the talent of speaking and conversing with clearness and facility on the abstrusest topics. In this respect, his speeches were greatly superior to his publications. The latter cannot be readily understood and followed without considerable attention; but nothing could exceed the skill and felicity with which he illustrated and explained the most difficult questions of Political Economy, both in private conversation and in his speeches. Without being forcible, his style of speaking was easy, fluent, and agreeable. It was impossible to take him off his guard. To those who were not familiar with his speculations, some of his positions were apt to appear paradoxical; but the paradox was only in appearance. He rarely advanced an opinion on which he had not deeply reflected, and without examining it in every point of view. And the readiness with which he overthrew the most specious objections that the ablest men in the House could make to his doctrines, is the best proof of their correctness, and of the superiority of his understanding. That there were greater orators, and men of more varied and general acquirements, in Parliament than Ricardo, we readily allow; but we are bold to say, that in point of deep, clear, and comprehensive intellect, he had no superiors, and very few, if any, equals, either in Parliament or in the country.
Not less generous than intelligent, he was never slow to come forward to the relief of the poor and the distressed; and while he contributed to almost every charitable institution in the metropolis, he supported, at his own expense, an alms-house for the poor, and two schools for the instruction of the young, in the vicinity of his seat in the country.
Besides the publications previously enumerated, he left one or two manuscripts. Among others a “Plan for the Establishment of a National Bank” was found in a finished state, and was soon after published.
He also left “Notes” on Mr Malthus’s Principles of Political Economy; containing a vindication of his own doctrines from the objections of Malthus, and showing the mistakes into which he conceives the latter had fallen. But we doubt whether they have sufficient interest to warrant their publication. The truth is, that Mr Malthus never had any clear perception of Mr Ricardo’s peculiar doctrines, nor was he very successful in elucidating his own. Mr Ricardo refers as follows, in one of his letters, to Malthus’ tract on the “Measure of Value,” published in 1823:—“Have you seen Malthus’ book on the ‘Measure of Value’? His arguments appear to me fallacious from beginning to end. He would have done much better to rest his defence of the standard he has chosen upon the old arguments in its favour, which I think unsatisfactory. But those which he now uses are delusive, and scarcely to be understood.”
Though not properly belonging to the Whig party, Ricardo voted almost uniformly with the Opposition. He was impressed with the conviction that many advantages would result from giving the people a greater influence over the choice of their representatives in the House of Commons than they then possessed; and he was so far a friend to the system of the radical reformers, as to give his cordial support to the plan of voting by ballot; which he considered as the best means for securing the mass of the electors against improper solicitations, and for enabling them to vote in favour of the candidates whom they really approved. He did not, however, agree with the radical reformers in their plan of universal suffrage. He thought the elective franchise should be given to all who possessed a certain amount of property; but he was of opinion, that while it would be a very hazardous experiment, no practical good would result from giving the franchise indiscriminately to all. His opinions on these subjects are fully stated in the “Essay on Parliamentary Reform,” and in the “Speech on the Ballot,” in the collected edition of his works.
Of the value of the services which he rendered to Political Economy, there can be, among intelligent men, only one opinion. His works have made a large addition to the mass of useful and universally interesting truths, and afford some of the finest examples to be met with of discriminating analysis, and of profound and refined discussion. The brevity with which he has stated some of his most important propositions; their intimate dependence on each other; the fewness of his illustrations; and the mathematical cast he has given to his reasoning, render it sometimes a little difficult for readers, unaccustomed to such investigations, readily to follow him. But we can venture to affirm, that those who will give to his works the attention of which they are so worthy, will find them to be as logical and conclusive as they are profound and important. It was the opinion of Quintilian, that the students of eloquence who were highly delighted with Cicero, had made no inconsiderable progress in their art; and the same may, without hesitation, be said of the students of Political Economy who find pleasure in the works of Ricardo: Ille se profecisse sciat, cui Ricardo valde placebit.
When the circumstances under which he spent the greater part of his life are brought under view; and when it is also recollected that he died at the early age of fifty-one, it may be truly said that very few have achieved so much. His industry was as remarkable as his sagacity and his candour.
“The History of Mr Ricardo,” to use the words of Mr Mill, “holds out a bright and inspiring example. Mr Ricardo had everything to do for himself; and he did everything. Let not the generous youth, whose aspirations are higher than his circumstances, despair of attaining either the highest intellectual excellence, or the highest influence on the welfare of his species, when he recollects in what circumstances Mr Ricardo opened, and in what he closed, his memorable life. He had his fortune to make; his mind to form; he had even his education to commence and conduct. In a field of the most intense competition, he realised a large fortune, with the universal esteem and affection of those who could best judge of the honour and purity of his acts. Amid this scene of active exertion and practical detail, he cultivated and he acquired habits of intense, and patient, and comprehensive thinking; such as have been rarely equalled, and never excelled.”
[1 ] See an Account of the Life of Mr Ricardo in the “Annual Obituary” for 1823, supposed to be written by one of his brothers.
[1 ] First Letter to the Right Hon. Robert Peel, by one of his Constituents, p. 61.
[1 ] The most disinterested and truly patriotic minister that this country has had since the Revolution.
[2 ] Mr Ricardo made the first of his prominent appearances on the 24th of May 1819, in the debate on the resolutions proposed by Sir Robert Peel, respecting the resumption of cash payments. He did not rise until he was loudly called upon from all sides of the House.
[1 ] Works, p. 493.
[2 ] Dated 8th July 1821.
[1 ] It is perhaps needless to say, that a thing may be expedient and necessary without being just. It may not only be expedient, but indispensable to the safety of a ship in a storm, to throw overboard some portion of the cargo; but it would be most unjust to allow a sacrifice incurred for the advantage of all, to fall exclusively on the owners of the ejected goods. And hence the practice, as old as the Rhodian law, but neglected in the case referred to, of average contributions.
David Ricardo, The Works and Correspondence of David Ricardo, ed. Piero Sraffa with the Collaboration of M.H. Dobb (Indianapolis: Liberty Fund, 2005). Vol. 6 Letters 1810-1815. Chapter: INTRODUCTORY NOTES TO THE CORRESPONDENCE
Accessed from oll.libertyfund.org/title/207/59159 on 2009-10-20
First published by Cambridge University Press in 1951. Copyright 1951, 1952, 1955, 1973 by the Royal Economic Society. This edition of The Works and Correspondence of David Ricardo is published by Liberty Fund, Inc., under license from the Royal Economic Society.
Summary.I. Ricardo’s Correspondence, p. xiii. II. The Main Correspondents: James Mill, p. xv; Malthus, p. xviii; McCulloch, p. xxi; Trower, p. xxiii; Say, p. xxv. III. Other Correspondents: Bentham, p. xxviii; Maria Edgeworth, p. xxxii; Grenfell, p. xxxiii; Grote, p. xxxiii; Horner, p. xxxiv; Murray, p. xxxv; Place, p. xxxv; Sharp, p. xxxvi; Sinclair, p. xxxvii; Tooke, p. xxxvii; Wakefield, p. xxxviii. IV. The Letters in the Present Edition, p. xxxviii.
The economic correspondence of Ricardo opens in 1810 when he is in his thirty-eighth year and covers the whole of his productive life as a political economist. Ricardo had four main correspondents with whom he was in constant communication over a period of years—James Mill, Malthus, McCulloch and Trower; while he maintained a less frequent exchange with Jean-Baptiste Say. By an extraordinary piece of good fortune both sides of each of the five series of letters have come down to us substantially complete.1
The Mill correspondence is of special interest as being entirely new and as throwing a vivid light on Ricardo’s apprenticeship as a writer and on the development of his thought. The correspondence with Malthus however, Ricardo’s side of which has long been known, and which is now completed, is of greater economic importance. It has the character of a sustained discussion, with a constant clash of two opposite viewpoints; and it is with reference to these letters that Keynes has written: ‘This friendship will live in history on account of its having given rise to the most important literary correspondence in the whole development of Political Economy.’2 The McCulloch letters, which cover a shorter period of years, reflect a relation almost of disciple to master, within which differences of opinion only occasionally arise on particular points; being mostly written previous to personal acquaintance, they are more exclusively devoted to economic matters. Finally, the correspondence with Trower has a peculiar interest as exhibiting an attempt to explain to a comparative layman the economic discussions in which Ricardo was engaged. All these, together with the letters exchanged with other persons with whom Ricardo discussed mainly subjects of an economic or political character, are given in these volumes in full.
In contrast with previously published collections, the letters to and from the various correspondents have been arranged in a single chronological series. The reader is thus placed as it were behind Ricardo’s desk at Gatcomb Park and reads the letters as Ricardo writes them or receives them. On the other hand those who wish to follow through one individual series of letters can do so with the help of the Index of Correspondents appended to each volume. (In Vol. IX the Index of Correspondents is cumulative and covers the four volumes.)
|Year||Mill||Malthus||Trower||McCulloch||Say||Other Correspondents||All Correspondents|
The distribution of the letters between the main correspondents and their frequency at various periods can be seen at a glance from the table above. It will be noticed from the table that in each of the four main series the letters from Ricardo are more numerous than those written to him. To some extent this is probably explained by Ricardo having been less methodical in keeping letters than his correspondents were. But it may also have been due to his greater activity as a letter writer. For example, the initiative in resuming a correspondence when it had been interrupted mostly came from Ricardo’s side (notably in the case of Mill).
More detailed information about the arrangement and annotation of the letters is provided at the end of this Introduction, after some account has been given of the individual correspondents.
James Mill (1773–1836). Ricardo and James Mill were first brought together as a result of the publication of Mill’s early pamphlet Commerce Defended in 1808: ‘the first of his writings which attained any celebrity’ (as John Stuart Mill writes) ‘and which he prized more as having been his first introduction to the friendship of David Ricardo, the most valued and most intimate friendship of his life.’1 Their intimacy, Ricardo tells us, however, was the consequence of the part which Ricardo took in the Bullion controversy of 1810;2 and when their correspondence begins, at the end of 1810, we find them already on terms of close friendship. Mill characteristically came to adopt the role of educator, and Ricardo always acknowledged a large debt to him for urging him on and encouraging him to write.
Mill, who had come to London from Scotland in 1802, lived at Newington Green and later, in 1814, moved to Queen Square in Westminster (where he rented a house from Bentham). In London they met regularly, at one time taking ‘almost daily’ walks together in the park,1 so that there was little occasion for letter writing. From 1814 onwards, however, both Ricardo and Mill used to be away from London during half of each year, between July and January; Ricardo going to Gatcomb Park, while Mill, together with his family, was the guest of Bentham at Ford Abbey in Devonshire, on the border of Somerset near Chard. Their correspondence has accordingly a highly seasonal character and is confined almost entirely to that period of each year.
Mill up to 1817 was engaged in writing his History of British India, and made a living by contributing to the reviews. His friends, however, were anxious to find him a regular position which would secure him a steady income and independence. It was at one time intended that he should be head of the projected ‘Chrestomatic School’, which however never materialized.2 In 1819, as a result of the appearance of his History and with the assistance of Ricardo and other friends, he secured an appointment with the East India Company as assistant examiner of correspondence.3 From that time he was so occupied at the office that his meetings with Ricardo were usually confined to Sundays.4 For the period of his vacation in the summer he went first to Marlow and from 1822 to Dorking. On several occasions he visited Ricardo at Gatcomb; in October 1814 going there (as he wrote) with ‘all my incumbrances, consisting of a wife, and five brats, and a maid’;5 in August 1818 he was there alone for ten days;6 in August and September 1820 ‘for more than three weeks’;7 and he was expecting to spend at Gatcomb the second half of September 1823, the month of Ricardo’s death.8
Much of the discussion in Ricardo’s correspondence with Mill arises from their reading one another’s manuscripts. We find Ricardo reporting on his work and on his reading to Mill, and Mill in return giving him advice on his writing and suggestions for reading. While the sterner side of James Mill’s character is well-known from the description in John Stuart Mill’s Autobiography, these letters show another and more genial aspect of him.
There are in these letters several indications of Ricardo’s friendly interest in Mill’s eldest son, John Stuart Mill, such as Ricardo’s invitation that he should come by himself to stay at Gatcomb in the summer of 1821, when he was fifteen years old.1 These are borne out by the passage in J. S. Mill’s Autobiography, in which he speaks of his connection with Ricardo: ‘My being an habitual inmate of my father’s study made me acquainted with the dearest of his friends, David Ricardo, who by his benevolent countenance, and kindliness of manner, was very attractive to young persons, and who after I became a student of political economy, invited me to his house and to walk with him in order to converse on the subject.’2 There are, however, no letters between them,3 although Ricardo’s last letter to James Mill of 5 September 1823 can be regarded as virtually directed to John, since it is entirely devoted to the discussion of a paper written by him on the measure of value.
The letters of James Mill to Ricardo are in the Ricardo Papers.4 The letters which he received from Ricardo were carefully filed and docketed by James Mill. Together with the papers which were sent to him at Ricardo’s death (among them unpublished manuscripts and two letters from Malthus and one from McCulloch received by Ricardo a short time before) they form what we have called the Mill-Ricardo papers.5 These were inherited by John Stuart Mill, and from him (it is not clear whether before or after his death) they passed to his friend John Elliot Cairnes, the economist;1 it was among the Cairnes family possessions that they were found by Mr C. K. Mill in 1943 and made available for the present edition (as has been described in the General Preface in Volume I).
By the time these letters to Mill were found, however, the rest of the correspondence had been annotated and made up into page. The newly-found letters were inserted in their proper chronological order, efforts being made to disturb as little as possible the work already done; in particular avoiding the transfer of notes from the old to the new letters unless essential. As a result the letters of Ricardo to Mill are less fully annotated than the others: for example, in the case of letters 506 to 509, written from abroad in 1822, no biographical notes are given about the persons whom Ricardo met, since notes had already been attached to the Journal of a Tour on the Continent (to be included in Vol. X), where the same persons recur.
Thomas Robert Malthus (1766–1834). The correspondence between Malthus and Ricardo began in June 1811, when, immediately following their first meeting, both of them, independently, started to write to one another. Malthus’s letter, however, reached Ricardo before Ricardo had sent his own, which he had to adapt accordingly. Malthus’s letter and the first draft of Ricardo’s opened with curiously similar words, to the effect that, ‘as we are mainly on the same side of the question’, as Malthus wrote, or ‘as we are so nearly agreed on the principles’, as Ricardo put it, they should endeavour to remove the few points of difference between them by ‘amicable discussion in private’, as they both said in identical words.2
This first meeting had taken place on Malthus’s initiative and perhaps through the intermediary of their mutual friend Richard Sharp, who is frequently mentioned in these early letters as a participant in joint breakfast parties at which Ricardo and Malthus met.
At the time of their first meeting, while Ricardo had only just appeared in print, Malthus had long been known to the public as the author of the Essay on Population, which, having been first published in 1798, was now in its fourth edition. Malthus had been educated at Jesus College, Cambridge, where he succeeded to a Fellowship in 1793. His College tutor had been William Frend, who in the same year became the centre of a storm in the University, being attacked for Jacobinism and irreverence to religion.1 Later Malthus took orders and in 1798 obtained a curacy at Albury in his native county of Surrey. From 1806, and throughout the period of his correspondence with Ricardo, he was Professor of History and Political Economy at the East India College at Haileybury, Hertfordshire, which was a residential establishment for the training of cadets for the Company’s service. The College was well-known for the unruliness of its students: a matter which is often referred to in the letters. The Professors lived in with their families and Malthus occupied the house under the college clock-turret.2
Ricardo from time to time paid week-end visits to Haileybury to stay with Malthus, and Malthus made frequent visits to London where he invariably had meetings with Ricardo, sometimes staying at his house, first at Mile End and then in Upper Brook Street. Later, on several occasions Malthus, who regularly spent his vacations at Bath with the Eckersalls, his wife’s relatives, on his way visited Ricardo at Gatcomb Park in Gloucestershire.
While the Malthus-Ricardo letters are less influenced than the other series by the passing events of the day, and approach more nearly to a systematic discussion, yet they range over the whole wide field of their disagreement and do not lend themselves to a classification by subjects. However, at some periods one topic becomes dominant. Thus in the early period of 1811–12 the correspondence is exclusively devoted to currency and foreign exchange; the crowded letters of the spring of 1815 are concerned with rent, profits and the price of corn; those of 1820 and the early summer of 1821, with the causes of stagnation and the possibility of a general glut; and the final group of 1823, with the revived controversy upon the measure of value.
Although Malthus had a son and two daughters, none of these left any children; so that Ricardo’s letters passed to the descendants of Malthus’s elder brother, Sydenham.1 It was the latter’s grandson, Col. Sydenham Malthus, who placed them at the disposal of Dr Bonar for his original publication. Col. Malthus’s son, Mr Robert Malthus, formerly of Albury, Surrey, has made the MSS available for the present edition.
Ricardo’s letters were known to William Empson, who as Professor of Law had been for many years Malthus’s colleague at Haileybury, and he quoted a number of passages in his biographical article on Malthus in the Edinburgh Review of January 1837. The letters were published under the title of Letters of David Ricardo to Thomas Robert Malthus 1810–1823, edited by James Bonar, Oxford, Clarendon Press, 1887.2
The letters of Malthus, on the other hand, remained for a long time undiscovered. Dr Bonar caused the representatives of Ricardo, as he says in his preface, ‘to make search for the corresponding letters of Malthus, but without success’. These finally came to light with the Ricardo Papers, which Mr Frank Ricardo made available for the present edition.3
There are in Bonar’s edition a number of mistakes in the dating of letters; these have had the effect of muddling the sequence of development of Ricardo’s thought and have stood in the way of a proper study of that development. The first instance is that of the letters attributed to 1810, which turn out to belong to 1813.1 This has had the consequence (apart from antedating the beginning of the friendship between Ricardo and Malthus) of advancing by three years the formation of Ricardo’s theory of profits, which is first outlined in those letters, and of concealing the fact that up to 1813 Ricardo’s concern was almost exclusively with monetary questions.2 No less serious has been the misdating of Ricardo’s letter to Malthus of 5 March 1817, which in that edition is given as of 1816.3 Since this letter mentions the last chapter of Ricardo’s Principles as being ready to go to the printers, this error has made it seem that that work had already been completed at a time when the writing of it was in fact in the initial phase, and it has accordingly made it difficult to reconstruct the stages in which the book was put together. Two other errors are of minor importance: the letter of 8 May 1815 is there misdated Oct. 1815, and that of 3 April 1817 is misdated 3 June 1817.4
Numerous short passages of a personal nature were omitted in Bonar’s edition; these have been restored in the present edition without specific mention.
John Ramsay McCulloch (1789–1864). Ricardo’s connection with McCulloch had its beginning in 1816 when McCulloch sent him from Edinburgh successively two pamphlets on the National Debt. But the real start of their correspondence was when McCulloch reviewed the Principles of Political Economy in the Edinburgh Review for June 1818. In this review, which was decisive in establishing Ricardo’s fame and popularizing his doctrines, he showed himself the most complete convert and disciple of Ricardo’s theories, as he was to become the main defender of his doctrines against criticism. Over the next five years they corresponded regularly; but it was not until 1823 that they met, when McCulloch came to London for a visit of six weeks in May and June and a number of discussions took place between them during these weeks.
McCulloch’s chief occupation at this time was on the staff of the Scotsman newspaper. This had been founded by a group of Reformers as a weekly in 1817 (becoming bi-weekly in 1823) in order to oppose the dominance of the Scottish Tories. McCulloch became at first a contributor and later for a time the editor. He wrote all the political economy in the paper, often devoting to it the leading article, or ‘disquisition’, which occupied the whole front page. As the Edinburgh Review said: ‘Scotland boasts but one original newspaper, the Scotsman, and that newspaper but one subject—Political Economy.—The Editor, however, may be said to be king of it.’1 At the end of 1819 Ricardo was induced to become a regular subscriber, and thereafter comment on these articles was a frequent subject of their correspondence.
After Ricardo’s death McCulloch came to be regarded as the main representative of the Ricardian tradition. At the end of 1823 a committee of Ricardo’s friends was formed to institute a series of lectures on Political Economy in London in his memory; and McCulloch was chosen as lecturer in 1824. He was author of the most widely known biography of Ricardo; and in 1846 the editor of his Works.
Passages from Ricardo’s letters were quoted by McCulloch in his Literature of Political Economy, 1845 (p. 177–8), in the ‘Life’ prefixed to his edition of Ricardo’s Works, 1846 (p. xxvi), with some additional quotations in the reprint of the ‘Life’ in McCulloch’s Treatises and Essays (2nd ed. 1859, pp. 559 and 562), and later by Hugh G. Reid in the Biographical Notice of McCulloch in the 1869 edition of the latter’s Dictionary of Commerce.
After McCulloch’s death the letters passed into the possession of his executors, and the last survivor of them, his biographer and son-in-law Reid, presented them to the British Museum in 1894, where they are entered under the class-mark Add. MSS. 34,545. They were published under the title of Letters of David Ricardo to John Ramsay McCulloch 1816–1823, edited by J. H. Hollander, in the ‘Publications of the American Economic Association’, vol. x, Nos. 5–6, Sept. and Nov. 1895.
The letters of McCulloch to Ricardo were found among the Ricardo Papers.1 Some of McCulloch’s letters however (17 out of35) were in the bundle found earlier (1919) by Mr Frank Ricardo and these were published as a pamphlet in the series ‘A Reprint of Economic Tracts’, edited by J. H. Hollander, under the title Letters of John Ramsay McCulloch to David Ricardo 1818–1823, Baltimore, The Johns Hopkins Press, 1931. The others were found in 1930 and are published here for the first time.
Hutches Trower (1777–1833). Unlike the other main correspondents of Ricardo, Trower has no claim to literary fame in his own right; he is only remembered because of this correspondence. He was, like Ricardo, a stockbroker and their friendship had been formed in the early years of the century, when they were accustomed to meet daily and to pursue their discussions amid ‘the tumultuous scenes’ of the Stock Exchange. They found common ground as admirers of the work of Adam Smith and of the articles on political economy which had appeared in the early numbers of the Edinburgh Review from 1802.2 As we have seen,3 they found themselves on opposite sides in the early stages of the Bullion controversy in 1809, when both contributed anonymously to the Morning Chronicle; and it was only after publication that Ricardo discovered the identity of his critic.
Trower’s mother was a Miss Smith, aunt of Sydney Smith, the essayist; he was born at Clapton on 2 July 1777 and was adopted by a Mr Palmer who made him his heir. He became a member of the new Stock Exchange on its foundation in 1802, and retired in 1812, when his partnership with his brother, John Trower, was dissolved; the business being thereafter carried on by the latter until his own retirement in 1822.1 In 1813 he married Penelope Frances, daughter of Gilbert Slater or Sclater. The following year he purchased as a country residence Unsted Wood, at Godalming, Surrey. This was the same year as Ricardo acquired Gatcomb Park; and thereafter the correspondence between them settled down to a fairly regular exchange at roughly monthly intervals.2 Trower never visited Gatcomb, despite repeated invitations; and when at last he agreed to come, Ricardo’s death intervened before the date arranged for the visit. Trower himself died on 5 June 1833 from an injury to the spine. He left four daughters, and his widow lived until 1875.
(The information in the preceding paragraph, except that relating to the Stock Exchange, was supplied by his daughter, Miss Frances Trower, in 1895, a year before her death, to Bonar and Hollander, and it is here taken from the Introduction to their edition of Ricardo’s Letters to Trower.)
After Trower’s death Ricardo’s letters appear to have become divided into two groups. The first group was composed of the last 24 letters addressed by Ricardo to Trower (together with the two letters of Anthony Austin), and was donated by Mrs Trower ‘through Mr Greenough’3 to the Library of University College, London (according to an entry dated 22 Feb. 1844 in ‘Additions to the Library’). The second group, consisting of the 30 earliest letters to Trower, remained undiscovered among Trower’s papers until in 1895 they were found by Miss Trower. Eventually this second group of letters also was presented to the Library of University College by the executors of Miss Trower; and the whole was published in Letters of David Ricardo to HutchesTrower and Others 1811–1823, edited by James Bonar and J. H. Hollander, Oxford, Clarendon Press, 1899.
Trower’s letters to Ricardo came to light with the Ricardo Papers.1
Jean-Baptiste Say (1767–1832) was given a commercial education in France and England, but his prospects of a business career were brought to an end by his father’s ruin in the collapse of the Assignats. He turned to literary activities, and in 1803 published his Traité d’ Économie politique. This work, however, found no favour with the authorities, and Say went into industry, establishing a spinning mill of 400 workers in the country near Paris. Shortly before the fall of Napoleon he sold his interest to his partner, and returned to Paris. In 1814, following the change of government, he was enabled to publish a second edition of his Traité. In the autumn of the same year he was sent to England on a government mission to report upon the progress of industry. Here he was introduced by William Godwin to Francis Place, and through Mill to Ricardo, whom he visited at Gatcomb Park. From Gatcomb Ricardo and Say went together to visit Bentham at Ford Abbey.2 This was the beginning of Say’s correspondence with Ricardo, which was from time to time revived by the publication of their respective works which they sent to one another. They met again on the occasion of Ricardo’s visits to Paris in 1817 and 1822, but Ricardo did not find him a ready talker on economic subjects.3 In 1821 Say was appointed to the Chair of Industrial Economy newly established at the Conservatoire des Arts et Métiers in Paris. While from this time he devoted himself mainly to academic and literary pursuits, he was also occasionally concerned with projects of commercial speculation, in which in his letters he tried to interest Ricardo without success.4
Of Ricardo’s regular correspondents, Say is the one who more nearly seems to be writing with an eye to eventual publication (on one occasion he suggested that his letter should be communicated to the Political Economy Club by Ricardo).1 It is therefore not surprising to find him soon after Ricardo’s death making tentative arrangements for publication, although these came to nothing. The first hint was in his ‘Examen critique du discours de M. MacCulloch sur l’économie politique’ which appeared in the Revue Encyclopédique for September 1825. This was a general attack on Ricardo’s theories and in order, as he says, to forestall the reproach of not having before made known his opinion of the doctrines of Ricardo, he writes: ‘on verra peutétre quelque jour, par notre correspondance, que, si j’ai evité de le combattre sous les yeux du public, je soutenais néanmoins à huis clos contre lui, quelques combats dans l’interét de la vérité.’2 It would seem that Say had intended actually to publish his own letters as an appendix to the article (and possibly also a translation of Ricardo’s letters), since the following MS notice is appended to his own copy of it: ‘Les lettres originales de David Ricardo qui font partie de cette correspondance sont déposées au bureau de la Revue Encyclopédique, rue D’Enfer-St-Michel Numéro 18 a Paris, ou l’on peut en prendre connaissance.’3
It is unlikely that this publication by ‘deposit’ did in fact take place. But a few weeks later (in November 1825) we find Say writing to Francis Place4 with a view to the translation and publication in English of a small volume containing his correspondence with Ricardo and a few other pieces. However, in January 1826, after receiving a specimen of Place’s translation, Say seems to have changed his mind; and in a letter of 18 January, written partly in English and partly in French, he writes that while comparing Place’s English with his own French ‘some scruples got into my head’, among them the question, ‘What will Ricardo’s family think of the publication?’ He announces his intention of abandoning the project, and expresses regret for the wasted work of Place and himself—as regards the latter, adding a significant phrase on the trouble he has taken about his correspondence with Ricardo: ‘Je regrette d’avoir pris la peine de mettre au net ma correspondance avec Ricardo’;1 which perhaps explains some of the discrepancies that are noticeable between the version of Say’s letters which was subsequently published and the original MSS in the Ricardo Papers.2
Besides his scruples, a more decisive reason may have been Say’s dissatisfaction with what he had seen of Place’s translation; for on the folder containing the sample MS which he had received, and which is among his papers, he noted: ‘Il s’y trouve la traduction anglaise que Francis Place avait essayé d’en faire, et qui ne vaut rien.’
Despite these contretemps, Ricardo’s letters to Say were among his first to be published: they appeared (in French translation), with some of Say’s replies, in Say’s Mélanges et Correspondance d’économie politique, a posthumous collection edited by his sonin-law, Charles Comte (Paris, Chamerot, 1833), and were reprinted in Say’s Œuvres diverses (Paris, Guillaumin, 1848), a volume in the ‘Collection des principaux économistes’.
In the present edition Ricardo’s letters to Say are published in the original English from the MSS. These letters are among J.-B. Say’s papers, and were placed at the disposal of the editor before the war by their owner, M. Edgar Raoul-Duval, of le Havre, a great-grandson of J.-B. Say.
Jeremy Bentham (1748–1832). At the time of this correspondence Bentham had ceased for some years to be occupied with economic questions and had become absorbed in projects of law reform. When exactly he first met Ricardo is uncertain; but it is clear that it was Mill, with whom both had been acquainted for some time, who introduced them to one another not long after the summer of 1811.1 The letters between them are in the nature of occasional notes and are clearly not part of a continuous correspondence. These, together with other pieces of evidence, give a picture, however, of fairly close personal contact between them over the years, this contact being maintained mainly through Mill. Once, in 1814, Ricardo visited Bentham at Ford Abbey with Say; on occasions, in London he dined with Bentham at his house in Queen Square Place, and they went for walks together, as is shown, for instance, by the allusion in a letter of 1820 to meeting in the Green Park ‘at the usual hour’.2 Bowring records that Bentham used to boast: ‘I was the spiritual father of Mill, and Mill was the spiritual father of Ricardo: so that Ricardo was my spiritual grandson.’3
A few letters exchanged between Ricardo and Bentham have been omitted in these volumes as being of insufficient interest: they concern details of the abortive business of setting up the Chrestomathic School planned by Bentham. This was intended to be an extension to higher (i.e. secondary) education of the Lancaster System, which was a method of instruction based on the teaching of lessons by a master to ‘monitors’, who in turn taught the other pupils. A nation-wide association had been started in 1810, the Royal Lancastrian Association, to which ‘the existing system of popular education in England can be traced directly back’.1 Bentham wrote a plan for a Chrestomathic School and sent it to Ricardo in 1814 to elicit his support, which Ricardo promised to give in the form of a subscription. In 1816 a committee was formed to further the project, with Francis Place as secretary and Ricardo and Mill among its members. In 1817 it was proposed that Ricardo should buy the ground in the centre of Leicester Square and make it available for building the school. Ricardo had almost completed the purchase at a price of £3300,2 when, on hearing that the shopkeepers in the square had threatened legal action to stop any building on this site, he refused to proceed with the purchase rather than become involved in litigation, and the proposal was abandoned. An alternative project was to build the School in Bentham’s garden in Queen Square Place. Prolonged negotiations ensued on the clauses of the lease which Bentham was to grant to the School, negotiations in which Ricardo took part. Bentham, however, became increasingly difficult to satisfy, and no agreement could be reached. This was soon followed by the abandonment of the whole scheme. The committee was wound up in 1821, and the sums contributed were returned to the subscribers.
These fruitless negotiations over a period of six or seven years have left their trace in a number of letters and papers in which Ricardo is concerned. The MSS of these letters are in various places: (i) The British Museum Newspaper Library, Place Collection of Newspaper Cuttings, vol. 60, ‘Chrestomathic School’ (which includes inter alia the Minutes Book of the Committee of the School); (ii) University College, London, Bentham MSS, case 165; (iii) the Ricardo Papers. Of these letters only those which contain passages referring to other matters have been included in the present volumes (although every letter, if included, has been given in full). All the others are unpublished. It may be convenient to list the letters in which Ricardo is involved, with their location:
Ricardo to Bentham and Mill, 15 July 1814. MS at University College, London. Letter 52 in the present edition. (Promises subscription.)
Ricardo to Place, from Upper Brook St., 5 April 1816. MS in Place Collection of Newspaper Cuttings, vol. 60, No. 11, fol. 2. (Accepts office as a manager of the School.)
Ricardo to Place, from Upper Brook St., 10 July 1816. MS in Place Collection of Newspaper Cuttings, vol. 60, No. 13, fol. 8. (Apologises for being unable to attend a meeting of the committee and announces collection of £1000 for the fund.)
Ricardo to Place, from Gatcomb Park, 7 Aug. 1817. MS in Place Collection of Newspaper Cuttings, vol. 60, No. 14, fol. 4. (Intimates his willingness to buy a piece of ground in the centre of Leicester Square and to lease it to the School.)
Ricardo to Place, from Gatcomb Park, 17 Aug. 1817. MS in Place Collection of Newspaper Cuttings, vol. 60, No. 14, fol. 6. (Announces that he is proceeding with the purchase of the ground in Leicester Square.)
Ricardo to Place, from Gatcomb Park, 18 Sept. 1817. MS in Place Collection of Newspaper Cuttings, vol. 60, No. 14, fol. 8. (Informs him that he has received news from his solicitors ‘that the shopkeepers of the Square are resolved by every means in their power to prevent the Ground being built on’, and that he has replied that unless the right to build was guaranteed he would decline the purchase.)
Bentham to Ricardo, from Queen Square Place, 16 May 1820. MS in R.P. (Asks him for details of a lease of land for a building for the Geological Society, as a precedent for the Chrestomathic School.)
Ricardo to Bentham, from Upper Brook St., 17 May 1820. MS at University College, London. (Replies that the lease to the Geological Society, of which he is one of the trustees, was not of land but of a house.)
Ricardo to Bentham, 18 May 1820. MS at University College, London. Letter 367 in the present edition. (Postpones a meeting.)
Bentham to Ricardo, 17 June 1820. MS in R.P. Letter 369 in the present edition. (Wishes the School to be in his garden so as to be under the inspection of James Mill; refers to the education of J. S. Mill.)
Bentham to Ricardo, from Queen Square Place, 2 July 1820. MS in R.P.; copy at University College, London. (Discusses details of the draft agreement for the lease of his garden for building the School [A letter from Mill to Ricardo which was enclosed is not extant].)
Ricardo to Mill, 3 July 1820. MS at University College, London; a partial copy in Bentham’s handwriting in Place Collection of Newspaper Cuttings, vol. 60, No. 25. Letter 370 in the present edition. (On the draft agreement for the lease, in reply to the missing letter from Mill mentioned under the preceding item.)
Bentham to Ricardo, from Queen Square Place, 6 July 1820. MS in R.P. (Arranging for a meeting of the committee.) Bentham to Ricardo, from Queen Square Place, 7 July 1820. MS in R.P. (Continues discussion of the details of the agreement.)
Ricardo to Place, from Gatcomb Park, 4 Aug. 1821. MS in Place Collection of Newspaper Cuttings, vol. 60, No. 26, fol. 8. (Concerns the winding-up of the committee; expresses anxiety ‘that the money should be divided amongst the subscribers according to their respective claims with as little delay as possible’.)
Place to Ricardo, from London, 21 Sept. 1821. MS in R.P. A postscript concerning Place’s book is quoted below, IX, 58, n. (Sends the final accounts of the School.)
Ricardo to Place, from Gatcomb Park, 23 Sept. 1821. MS in Place Collection of Newspaper Cuttings, vol. 60, No. 26, fol. 11. (Deals with the winding-up of the fund and repayment to the subscribers.)
In addition to the letters, there is in the Place Collection of Newspaper Cuttings, vol. 60, No. 25, a series of observations, in Ricardo’s handwriting, on Bentham’s draft agreement for the lease of his garden for the building of the school; each observation is followed by a reply in Bentham’s handwriting. This paper is undated, but is referred to in Ricardo’s letter to Mill of 3 July 1820 and is clearly contemporary with it.
Maria Edgeworth (1767–1849). At the time of these letters Miss Edgeworth was at the height of her fame as a novelist. When her correspondence with Ricardo begins, we find them on terms of established friendship; and in writing they are accustomed to refer to one another as ‘cousins’.1 In fact, the first letter between her and Ricardo is some weeks after she had been staying, with her two sisters, Fanny and Harriet, at Gatcomb Park in November 1821 as the guests of the Ricardos.2 Yet there is no earlier evidence of their acquaintance than a reference in a letter of Maria Edgeworth to her half-sister Honora of 26 Dec. 1820 (when she was staying with the Smiths3 at Easton Grey), which is franked by Ricardo. ‘Why I asked for a frank at all I cannot tell’ (she writes) ‘except for the honour and glory of having one from David Ricardo. He has been here one whole day and is exceedingly agreeable’.4 In 1822 she was again in London with her sisters; and in her letters home she refers repeatedly to ‘our delightful breakfasts at Mr Ricardos’.5
Both sides of the correspondence with Maria Edgeworth (with the exception of one letter) are among the few letters which had long been known to be in the possession of the Ricardo family at Bromesberrow Place, Ledbury. Ricardo’s side of the correspondence must have been returned to his family after his death by Maria Edgeworth or her heirs. In 1907 the Economic Journal, to which they had been made available, published in its issue of September 1907 extensive extracts from Ricardo’s letters and from two (out of five) of Maria Edgeworth’s. The MSS of these letters are referred to in these volumes as part of the Ricardo Papers.
One letter from Ricardo (letter 502), however, remained among Maria Edgeworth’s papers which are in the possession of her niece, Mrs Harriet J. Butler. This was made available through the kindness of Mrs Butler’s son, Professor H. E. Butler.
Pascoe Grenfell (1761–1838) was one of the leading speakers on financial subjects in the House of Commons. After Ricardo’s entry into Parliament Grenfell often sided with him on economic questions, although he strongly disagreed with the radicalism of Ricardo’s political views. He had a large business in the City as a metal merchant, and his country seat was Taplow House in Buckinghamshire. It was at his suggestion that Ricardo undertook in 1815 to write a pamphlet attacking the policy of the Bank of England, which took shape in Proposals for an Economical and Secure Currency. Most of Grenfell’s letters belong to that period and consist of promptings and information for the proposed pamphlet.1
The letters of Ricardo to Grenfell have not been found, although in 1933 searches were made, at the request of Lord Keynes, by the representatives of the two branches of the Grenfell family (both descended from the eldest son of Pascoe Grenfell): Lord Desborough, of Taplow Court, and Mr E. C. Grenfell, M.P. for the City of London.
George Grote (1794–1871), the historian of Greece, was partner in the banking house of Grote and Prescott. He became acquainted with Ricardo in 1817,2 and through him was introduced to the Benthamite circle.3 We have only a fragment of a letter of Ricardo to him; but he was one of the young students of political economy to whom what John Stuart Mill says of himself (in the passage quoted above, p. xvii) with reference to Ricardo’s kindliness to young persons could well be applied. Like John Mill, Grote used to be invited to Ricardo’s house and to walk and converse on the subject, as it appears from his diary for 1819, of which the following are extracts:1
‘Tuesday, March 23rd. Rose at 6. Read Kant, and ate a little bread and butter, till ½ past 8, when I went up to Brook Street to breakfast with Mr Ricardo; was very politely received by him; walked with him and Mr Mill in St. James’s Park until near 12, when I went into the City; my mother in town this day. Between 4 and 5 read some more Kant; dined at ½ past 5; wrote out again in the evening some of my remarks upon Foreign trade, and arranged them in a different manner. Bed at 11.
‘Saturday, March 27th. Rose at 6. Finished my remarks on Foreign trade, and enclosed them to Ricardo. Studied some more of Kant...I read a chapter in Ricardo’s “Pol. Econ.” Bed at 11.
‘Sunday, March 28th. Rose at ½ past 5. Studied Kant until ½ past 8, when I set off to breakfast with Mr. Ricardo. Met Mr. Mill there, and enjoyed some most interesting and instructive discourse with them, indoors and out (walking in Kensington Gardens), until ½ past 3, when I mounted my horse and set off to Beckenham. Was extremely exhausted with fatigue and hunger when I arrived there, and ate and drank plentifully, which quenched my intellectual vigour for the night. Bed at ½ past 10.’
Grote’s ‘remarks upon Foreign trade’ referred to in the diary can be identified with an unsigned MS essay on the theory of comparative costs which is among the Ricardo Papers. This consists of twelve pages under the title ‘Foreign Trade’: it is in the same handwriting and has the same general appearance as Grote’s papers on political economy in the British Museum,2 which belong to this period.
Francis Horner (1778–1817) had been one of the founders of the Edinburgh Review, and was the chairman of the Bullion Committee in 1810. Ricardo’s first letter to him, which opens this collection, is in the nature of a supplement to his own HighPrice of Bullion.1 It was written a few days after Horner’s motion in the House of Commons which led to the appointment of the Bullion Committee. From the formal style of this letter, it would seem that they were not well acquainted. Subsequently, they must have come into closer contact as active protagonists on the same side of the bullion controversy and owing to the many friends they had in common.
Ricardo’s letters to Horner are in the possession of Lady Langman, a great-granddaughter of Francis Horner’s brother Leonard.
John Murray (1778–1843), the founder of the firm, was Ricardo’s publisher, or ‘bookseller’ as it was then called, first in Fleet Street and after 1812 in Albemarle Street. Of his relations with Ricardo a contemporary says that, as an author, ‘Mr Ricardo never made anything. He gives his works to Murray’.2 That Ricardo claimed no royalties is confirmed by another contemporary, who says that he surrendered the Principles ‘into the hands of his bookseller, without thinking of that remuneration which, in this day, the highest have not been found to despise’.3 In the case of one of his pamphlets, on which he feared that Murray might make a loss, he even insisted on himself bearing any deficiency.4
The MSS of Ricardo’s letters are in the possession of Sir John Murray, the great-grandson of Ricardo’s publisher.
Francis Place (1771–1854), the radical tailor of Charing Cross, organiser of the Westminster Reformers, was a disciple of Bentham and a friend of James Mill; and it was presumably through the latter that he became acquainted with Ricardo. His correspondence with Ricardo turned on two subjects upon which Place had concentrated his efforts, the Sinking Fund and population. When Ricardo was commissioned to write an article on the Funding System in 1819, Mill asked Place to comment on the manuscript, which led to some correspondence between them. Ricardo’s letters on that occasion were first published in the Economic Journal for June 1893.1 In 1821 Place wrote a book in defence of Malthus against Godwin, which Ricardo read in manuscript. On this Ricardo wrote an extensive commentary (letter 451)2 and recommended it to Murray for publication. Some letters between Ricardo and Place on the business of the committee of the proposed Chrestomathic School, which are not included in the present collection, have been described above in the section on Bentham.3
Richard Sharp (1759–1835) was known as ‘Conversation Sharp’ and enjoyed a great reputation in Whig society and in literary circles.4 He was a considerable person in the City, where ‘his interests were divided between the wholesale trade in hats, carried on in Fish St., and a connection with the West Indies— also a family one—which he developed into an extensive and successful business, with its headquarters in Mark Lane.’5 His partners in Mark Lane were Samuel Boddington and George Philips, who were also his intimate friends and are occasionally mentioned in these volumes. He was at various times a member of Parliament, and was Ricardo’s immediate predecessor as member for Portarlington. In 1810 he was a member of the Bullion Committee. Although we have only two of their letters, Sharp appears to have been among Ricardo’s friends since the early years of this correspondence, in which his name constantly recurs.
The papers of Richard Sharp are in the possession of the Hon. Mrs Eustace Hills (Nina L. Kay-Shuttleworth), who in 1933 on the basis of them wrote a biography of Richard Sharp, which has remained unpublished. She has made available Ricardo’s letter and has also kindly lent the MS of her book.
Sir John Sinclair (1754–1835), the first President of the Board of Agriculture on its foundation, was responsible for the Statistical Account of Scotland and wrote a large number of books and pamphlets on finance and many other subjects. In his letters to him Ricardo accedes to requests for his opinion on proposals or publications by Sinclair, but is evidently unwilling to be drawn into prolonged discussion.
The five letters from Ricardo were included in The Correspondence of the Rt. Hon. Sir John Sinclair, Bart., 2 vols., London, Coburn and Bentley, 1831, published in Sinclair’s lifetime. There must have been some further letters; one of them evidently comes between Sinclair’s letters to Ricardo of 19 and 29 Oct. 1814, and a sentence from a later one is quoted by Sinclair’s biographer: ‘“I am favourable to a system of banking in this country similar to that which prevails in Scotland”—Letter from David Ricardo, Esq., 25th March, 1823.’1 The papers of Sir John Sinclair, however, have not been found. His great-grandson, Sir Archibald Sinclair, M.P., has caused a search to be made at Thurso Castle, Caithness, the family seat, without result. John Rae, when he was preparing his Life of Adam Smith, 1895, presumably attempted to trace these papers, in connection with a letter to Sinclair from Adam Smith of which he says that it ‘is no longer extant’ (p. 344).
Thomas Tooke (1774–1858), the economist, was a Russia merchant, being partner of Stephen Thornton, Brothers and Co. He gave evidence to the Committees of 1819 on the Resumption of Cash Payments, and was called by Ricardo as a witness before the Agricultural Committee of 1821, in which connection two of his letters to Ricardo arose. He was, with Ricardo, one of the founders of the Political Economy Club in 1821. Although he is famous as the author of the History of Prices, in Ricardo’s lifetime he only published a first essay, the Thoughts and Details on the High and Low Prices of the Last Thirty Years, 1823.
Tooke’s letters are in the Ricardo Papers. Enquiries were made in 1932 of Tooke’s great-grandsons, Mr F. G. Padwick and Mr J. C. Padwick; but no letters of Ricardo could be found.
Edward Wakefield (1774–1854), father of Edward Gibbon Wakefield and author of An Account of Ireland, Statistical and Political (1812), was a long-standing friend of Mill and Place, and was employed by Ricardo as his land agent. There is a considerable number of his letters from 1815 to 1823 in the Ricardo Papers concerning exclusively the purchase and management of Ricardo’s estates. Of these, four letters have been included in the present correspondence because they deal with the acquisition of a seat in Parliament.
In the case of other correspondents whose interchange with Ricardo was limited to one letter, a brief biographical note is given with the letter or (as in the case of Étienne Dumont, below, p. 18, of John Whishaw, p. 66 and of Lord Grenville, VII, 220) where the name is first mentioned.
As has been said in section I, these four volumes comprise the letters to and from those persons with whom Ricardo corresponded on subjects of economic or political interest. But once a correspondent has been included, all the extant letters are given, even though some of them may be only of a personal or business character.1
The order in which the letters are arranged is that in which they were written or received by Ricardo. This occasionally diverges from the order of the dates written at the head of each letter, such anomalies arising whenever letters cross in the post or are received after delay. An extreme example is letter 510 from Maria Edgeworth, which, having been written on 9 July 1822, just before Ricardo left for his continental tour, was received by him only on his return in December, and is therefore placed after a letter of November of the same year.
To the heading of each letter there is attached a footnote which gives:
It will be noticed, with regard to (a), that the address is more often given in the case of letters previous to Ricardo’s entry into Parliament in 1819 than in subsequent ones. The reason for this disparity is that, since a lower postage was charged on letters of a single sheet,1 there was a general tendency to write the address on the back of the letter itself, instead of using a separate sheet as cover. In the later period, however, as a member of Parliament, Ricardo had the privilege of ‘franking’ letters and also of receiving them free of postage; there was accordingly no longer any objection to separate covers for the address, and these were liable to be destroyed.
(A person entitled to frank letters had to write the address in his own handwriting, adding the date, with the day and the month spelt out in full, and his signature. A facsimile of this type of letter, franked by Ricardo, will be found at the end of Volume IX. This can be compared with the earlier specimen, before he was in Parliament, which is given at the end of Volume VII.)
Letters here published for the first time are recognizable by the absence of reference to previous publication. Besides, in the Contents and in the Index of Correspondents in each volume such new letters are denoted by an asterisk. In the case of letters which are only partly new, however, the sole indication of this is in the note to the heading of each letter: this applies to letters to Say which appear for the first time in the original English; to letters from Say given for the first time in their original version; to letters to Maria Edgeworth of which only extracts have previously been published; and to variants in drafts hitherto unpublished which are appended in notes to the letters to which they refer.
The heading of each letter gives references to the letter to which it is a ‘reply’ and to the one by which it is ‘answered’, where these exist. The link thus described may cover anything from mere acknowledgement to full discussion of the earlier letter. When a letter is labelled as being the reply to another one, no attempt is made to explain, in footnotes, allusions to events, persons or books which can be clarified by reference to the other letter.
Since the letters are dated by the day of the month, while references in the text of the letters are usually to the day of the week, calendars have been provided in each volume for the respective years (except for 1810, 1812 and 1813 where the number of letters is small).
In nearly every case it has been possible to establish the text on the original MS.1 Letters previously published have been printed from a copy of the earlier edition, corrected by collation with the MS; but no specific mention has been made of any errors in those editions (except in dates) that have been rectified.
In a number of cases it has been necessary to correct or to complete the date as written on the letter (the most common mistakes being in the year, which are apt to occur soon after its beginning). In such instances what seemed to be the correct date has been supplied in square brackets and the grounds for the inference, unless obvious, have been given in footnotes. Where the date at the head of a letter is given in square brackets without any explanation this invariably means that the date was omitted in the MS.
Most alterations in the MS have been described in the editor’s footnotes, and this has been done more fully in the case of Ricardo’s own letters. As in previous volumes, the spelling (even when eccentric), punctuation and abbreviations of the original MS have been retained, except for ‘&’, Mr., Mrs. and Dr. which have been printed as ‘and’, Mr., Mrs. and Dr.
Ricardo’s letters are usually written on quarto-size note-paper and in the later years this is often gilt-edged. After 1814, when he acquired a coat-of-arms, they are fastened with wax impressed
with one or other of his two seals (here redrawn in the size of the originals from wax impressions on his letters), more frequently the small one with his initials surmounted by the bird crest, and only occasionally the larger one with his full coat-of-arms.
|1 Calendars for 1810, 1812, and 1813 have been added to the Liberty Fund Edition.]|
|R.P.||Ricardo Papers (consisting of letters received by Ricardo, and other of his papers, in the possession of Mr Frank Ricardo).|
|Mill-Ricardo papers||The letters and papers of Ricardo that belonged to James Mill, and which passed into the possession of the Cairnes family and Mr C. K. Mill.|
|‘at Albury’||Papers in the possession of Mr Robert Malthus, of The Cottage, Albury, Surrey.|
The following abbreviations are used by Malthus, Mill and Bentham, respectively, in their letters:
[1 ]The letters which, from the internal evidence of those extant, can be inferred to be missing do not exceed one-tenth of the total number.
[2 ]‘Robert Malthus’, in Essays in Biography, 1933, p. 137.
[1 ]J. S. Mill, Principles of Political Economy, Bk. iii, Chap. xiv, §4; Ashley’s ed., 1909, p. 563.
[2 ]Letter to Trower, 26 Jan. 1818, below, VII, 246.
[1 ]Letter to Malthus, 25 May 1818, below, VII, 263.
[2 ]See below, VII, 182, n. 1.
[3 ]For details on Mill’s post, see below, VIII, 40, n.
[4 ]See letter to Trower, 13 March 1820, below, VIII, 162.
[5 ]Below, p. 137. Four more children were born subsequently; in all four sons and five daughters.
[6 ]Below, VII, 285, 292, 293, n.
[7 ]Below, VIII, 231, and cp. 241, n.
[8 ]Below, IX, 329, 333.
[1 ]Below, IX, 44 and 104, and cp. 48 and 115.
[2 ]Autobiography, 1873, p. 54.
[3 ]What was believed to be ‘a juvenile note by John Stuart Mill’ addressed to Ricardo (Minor Papers, ed. by J. H. Hollander, 1932, p. 229) turns out to be a postscript by James Mill to one of his own letters (see below, IX, 331, n. 3).
[4 ]Two of these (letters 413 and 539), found earlier, were printed in Ricardo’s Minor Papers, ed. by J. H. Hollander, Baltimore, The Johns Hopkins Press, 1932.
[5 ]With the exception of letter 370, which is among the Bentham MSS at University College, London.
[1 ]A parallel is found in the fate of the copy of the first edition of the Principles (1817) which Ricardo presented to James Mill and which is now in the Library of the London School of Economics. It is inscribed (not in Ricardo’s hand) ‘From the Author’, and contains the following note written by Lord Courtney on the inside of the cover: ‘This volume was presented by the author to James Mill, from whom it passed to John Stuart Mill, by whom it was given to John Elliot Cairnes, on whose death I selected it from his books in accordance with his death bed request July 1875 Leonard H. Courtney’.
[2 ]Below, pp. 21 and 24, n. 1. The subject of discussion was Bullion, on which they had been having a ‘controversy in print’, as Malthus calls it in his first letter. On that stage, see above, III, 10–12.
[1 ]Frend will be noticed again, in Volume X, as an early acquaintance of Ricardo.
[2 ]Memorials of Old Haileybury College, by F. C. Danvers and others, Westminster, 1894, p. 199.
[1 ]On the other hand his library (after passing into the possession of his son, the Rev. Henry Malthus) went to the descendants of his sister, Mrs Bray, and in 1949 was presented by Mr R. A. Bray to Jesus College, Cambridge.
[2 ]Letter 454 from Ricardo came only recently to light and was published by Professor Viner in 1933. Letters 12 and 14 have not been previously published.
[3 ]Malthus’s letter 62 was published by Professor Foxwell in the Economic Journal in 1907, and letter 540 was included in Letters to McCulloch, 1895. For the location of the MSS of these separated letters (among them letters 536 and 545, in the Mill-Ricardo papers) see footnotes to the letters.
[1 ]This no doubt arose from Ricardo’s ‘3’ in those cases being written like a broken ‘O’. These are letters 39, 40, 41, 42 and 43. Similar in form, though unimportant, is the misdating of letter 76 as of 10 (instead of 13) Feb.1815.
[2 ]Cp. above, IV, 3.
[3 ]Letter 206. This arose from a slip of the pen in the original MS.
[4 ]Letters 96 and 213.
[1 ]‘The Periodical Press’ in Edinburgh Review, May 1823, p. 369. This article (which is frequently quoted in notes to these volumes) is attributed to William Hazlitt.
[1 ]Except letter 541 which came to light with the Mill-Ricardo papers.
[2 ]See the reminiscent passages in Ricardo’s letter to Trower of 26 Jan. 1818, below, VII, 246.
[3 ]Above, III, 4–5.
[1 ]‘List of the Members of the Stock Exchange from its Establishment in 1802’, compiled by George Webb, Sec., 1855, and Minutes of the Stock Exchange Committee for General Purposes, entry of 6 July 1812 (MSS in the possession of the Stock Exchange; quoted by kind permission of the Secretary).
[2 ]See Trower’s reference to ‘our ordinary course of correspondence’, below, IX, 315.
[3 ]This was George Bellas Greenough, the geologist, a friend of Ricardo and Trower.
[1 ]Of these, two (letters 534 and 547), which had become separated from the rest, were published by Hollander in Ricardo’s Minor Papers, Baltimore, 1932.
[2 ]See below, pp. 156–61.
[3 ]See below, IX, 244 and cp. below, p. 161.
[4 ]See below, VII, 166 and 224–6.
[1 ]See below, IX, 36.
[2 ]Revue Encylopédique, vol. 27, p. 719. Reprinted under the above title in Say’s Œuvres diverses, p. 279.
[3 ]MS in Say’s papers; kindly communicated (with another note quoted below, p. xxvii) by M. Raoul-Duval.
[4 ]Letters from Say to Place, 11 and 27 Nov. 1825 (unpublished MSS in British Museum, Add. 35,153, fols. 229–33).
[1 ]Say to Place, 18 Jan. 1826 (ib. fol. 235). See also letters of 7 March and 5 April 1826 (ib. fols. 236–7) and Say’s letter to Tooke, 14 May 1826 (misdated 1825) in Œuvres diverses, p. 525.
[2 ]See below, p. 273 and IX, 31, n. and 188, n.
[3 ]Say’s letter 356 however, since the MS is not extant, has had to be reprinted from the published version.
[4 ]Exceptions regarding the location of MSS are Ricardo’s letter 108, which is in the Moscow Historical Museum, and Say’s letters 347, which is in the library of Professor Hollander, and 393 which is in the Baker Library of Harvard University. The original versions of letters 446, 496 and 498 and a copy of 488, which were in the bundle of Ricardo Papers found in 1919, were published in Ricardo’s Minor Papers, ed. by J. H. Hollander, Baltimore, 1932.
[1 ]They had not yet met in the winter of 1810–11 when Ricardo at the request of Mill wrote his Notes on Bentham (which have been given in Volume III); nor in August 1811 when Bentham invited Ricardo to take a house near Barrow Green, in Surrey, where he was spending the summer together with Mill: see Ricardo’s first letter, below, p. 46.
[2 ]Below, VIII, 191. Cp. also Bentham’s reference to Ricardo: ‘We used to walk together in Hyde Park, and he reported to me what passed in the House of Commons’. (Quoted in ‘Memoirs of Bentham’, by J. Bowring, in Bentham’s Works, 1843, vol. x, p. 498.)
[3 ]ib. p. 498. Bowring, in his own memoirs written many years later, seems to have confused their relations when, after saying that it was Ricardo who introduced Mill to Bentham, gives Bentham’s dictum as: ‘I begot Ricardo and Ricardo begot Mill’. (Autobiographical Recollections of Sir John Bowring, 1877, p. 68.)
[1 ]Graham Wallas, Life of Francis Place, 1898, p. 93.
[2 ]See letter to Mill of 12 Sept. 1817, below, VII, 190.
[1 ]See below, IX, 240, 274, 295. There is no indication that they were actually related, either directly or through Mrs Ricardo.
[2 ]Her own description of this visit will be given in Volume X.
[3 ]See below, p. 135, n.
[4 ]A Memoir of Maria Edgeworth, by Mrs Edgeworth [her stepmother] ‘Not Published’, London 1867, vol. ii, p. 136. (Much of the material of the Memoir is reproduced in the published Life and Letters of Maria Edgeworth, ed. by A. J. C. Hare, 2 vols., London, Arnold, 1894.)
[5 ]Letter of 9 March 1822, Memoir, vol. ii, p. 180; and cp. letter dated Feb. 1822, ib. p. 175. See also below, IX, 230.
[1 ]One letter from Grenfell, dated 8 Aug. 1823, which is like the others in the Ricardo Papers, has been by exception omitted since it has no connection with the others and deals purely with the appointment of Ricardo as umpire in connection with the purchase of a process for manufacturing copper.
[2 ]Personal Life of George Grote, by Mrs Grote, London, Murray, 1873, p. 12.
[3 ]J. S. Mill, Autobiography, 1873, p. 72.
[1 ]Personal Life, p. 36–7.
[2 ]Add. MSS. 29, 530.
[1 ]Several passages of the letter were actually embodied in the third edition of the High Price of Bullion.
[2 ]J. L. Mallet, in a diary entry of 14 Jan. 1820, quoted more fully below, VIII, 152, n.
[3 ]Obituary of Ricardo in Windsor Express, Sept. 1823 (by James Hitchings, who had been tutor of Ricardo’s children).
[4 ]Below, VII, 14. On his scruples about accepting payment for his article in the Encyclopaedia Britannica, see below, VIII, 242–3.
[1 ]These MSS are in the British Museum, ‘Place Papers’ (a collection which is distinct from the ‘Place Collection of Newspaper Cuttings’, where are the Chrestomathic School letters).
[2 ]The MS of this is in the Seligman Library of Columbia University.
[3 ]A draft letter from Place to Ricardo dated 8 Feb. 1818 and concerned with details of the Finance Account for the previous year has also been omitted as of too little interest in the absence of Ricardo’s side of the discussion (MS in British Museum, Add. 27,836, fol. 90).
[4 ]An appreciation of the character and influence of Sharp, as ‘much more than the diner-out and the town-wit’, is given by John Morley in ‘The Life of James Mill’, Fortnightly Review, 1 April 1882, pp. 496–8.
[5 ]Quoted by permission from Mrs Eustace Hills’ MS book mentioned below.
[1 ]Memoirs of the Life and Works of Sir John Sinclair, by his son, the Rev. John Sinclair, 1837, vol. ii, p. 307, n.
[1 ]Exceptions to this rule have been noted above under Bentham, Grenfell and Wakefield.
[1 ]The postage had to be paid by the recipient, which incidentally helps to explain the occasional tone of apology by a writer for any un-usual frequency in his letters.
[1 ]In the few cases where the original MS has not been available, this can be inferred from the relevant footnotes.
David Ricardo, The Works and Correspondence of David Ricardo, ed. Piero Sraffa with the Collaboration of M.H. Dobb (Indianapolis: Liberty Fund, 2005). Vol. 5 Speeches and Evidence 1815-1823. Chapter: INTRODUCTION TO THE SPEECHES IN PARLIAMENT
Accessed from oll.libertyfund.org/title/206/38732 on 2009-10-20
First published by Cambridge University Press in 1951. Copyright 1951, 1952, 1955, 1973 by the Royal Economic Society. This edition of The Works and Correspondence of David Ricardo is published by Liberty Fund, Inc., under license from the Royal Economic Society.
Summary. I. Entering Parliament, p. xiii. II. Ricardo in Parliament, p. xix. III. Committees on which Ricardo Served, p. xxiii. IV. How the Speeches were Reported, p. xxvii. V. The Speeches in the Present Edition, p. xxxi.
Ricardo entered Parliament in the early part of 1819 after he had retired from the Stock Exchange and had written his main works on Political Economy. He remained a member of the House of Commons until his death in September 1823, after five years of active parliamentary life marked by constant attendance and frequent speeches.
The first suggestion that Ricardo should enter Parliament is in a letter from James Mill in the autumn of 1814, urging him to place himself ‘in that situation in which his tongue, as well as his pen might be of use.’1 This was at the time when Ricardo had just acquired Gatcomb Park with the intention of giving up business activity in the City. This intention could not be immediately carried out because of ‘the immense concerns in business’2 which entirely occupied him in the spring and early summer of 1815. In August of that year Mill writes again: ‘You now can have no excuse for not going into parliament, and doing what you can to improve that most imperfect instrument of government.’ He adds, ‘in a short time you would be a very instructive, and a very impressive speaker.’3 Ricardo’s reply was characteristic: ‘Your parliamentary scheme is above all others unfit for me,—my inclination does not in the least point that way. Speak indeed! I could not, I am sure, utter three sentences coherently’.4
In October 1816 Mill reverted to the subject, when, in connection with the absence of Francis Horner from Parliament, which he deplored, he wrote: ‘You ought indeed to be in parliament, and you must at any rate make arrangements for it at the general election.’1 At the end of November of that year Ricardo declined ‘an earnest invitation to become a candidate for the representation of Worcester’, where a vacancy had occurred. Confronted with the need to answer by return of post, and with the danger of being ‘hurried into all the horrors of a contested election’, his ‘decision was as prompt as the occasion required’2 and Mill in reply expressed full agreement with the decision to decline the offer. ‘If I were in your situation (Mill wrote), the rottenest Borough I could find would be my market, with nothing to do but part with a sum of money.’3
A year later, in December 1817, Edward Wakefield, a friend of Mill who acted as land agent to Ricardo, was negotiating for the borough of Portarlington: the seat for which Ricardo was eventually returned in 1819. This was a typical pocket borough in Ireland, in the patronage of the Earl of Portarlington.4 Ten years earlier, on 28 April 1807, when a General Election was imminent, we find Wellington, then, as Sir Arthur Wellesley, Chief Secretary for Ireland, writing from Dublin Castle: ‘Lord Portarlington is in England, and the agent who settled for that borough upon the last general election was Mr Parnell.5 We have no chance with him, and it would be best to arrange the matter with Lord Portarlington. I heard here that he had sold the return for six years at the last election, and if that should be true, of course we shall not get it now.’6 In fact, at the General Election on 23 May 1807 William Lamb (afterwards Lord Melbourne) was returned for Portarlington as an opposition member; but appears to have ‘lost his seat in 1812 for his support of catholic emancipation’.1 At the General Election of 1816, however, another oppositionist, Richard Sharp, a close friend of Ricardo, was returned for the seat and still held it at the time of Wakefield’s negotiations.
The approach to Wakefield had been made by an agent of the Earl of Portarlington with the object of raising a loan on the security of the Portarlington estates including the borough.2 The Earl had already borrowed large sums on annuities,3 and his estates had been assigned to trustees, one of whom was Sir Henry Parnell, his brother-in-law and an opposition member of Parliament. It was intended to use the proposed loan to pay off the annuities encumbering the estates. The amount required was ‘from 10 to £20,000’.4 Wakefield offered to lend the money on condition that he could nominate the member for the borough at ‘the market price of the day’, this price to be determined by ‘some distinguished and honourable member of the house ... —say such a person as Mr. Grenfell’.5 He thereupon wrote to Ricardo that, if these terms were accepted, the seat would be placed at his service.6
The Earl’s agent, however, proceeded to enquire whether Ricardo, if elected, would vote with the Ministers; and on receiving Wakefield’s reply that ‘politics must not be named— but perfect freedom’, the negotiations came to an end, on the ground that ‘Lord Portarlington found there was nothing to be got by returning an opposition man’.1 The fact, noted by Wakefield, that the Earl’s agent (N. Kirkland) was cousin of Charles Arbuthnot, Patronage Secretary in the Government, suggests that it was he, even more than Lord Portarlington, who was anxious to secure the return of a ministerialist.
A number of other seats were also considered about this time.2 Nothing resulted, however, from these negotiations, and by the time of the General Election Ricardo had become reconciled to having no seat. He writes to Malthus on 24 June 1818: ‘I believe it is now finally settled that I am not to be in Parliament, and truly glad I am that the question is at any rate settled, for the certainty of a seat could hardly compensate me for the disagreeables attending the negociation for it’;3 and to Trower on 27 June: ‘My own endeavors to get a seat in the House have not been attended with success, but I believe that amongst all those who are disappointed, in a similar manner, there is not one more resigned than I am. I could meet with nothing where I should not have had a contest, which I was exceedingly unwilling to encounter’.4 At the General Election, on 11 July 1818, the sitting member, Richard Sharp, was again returned for Portarlington.
Soon after the General Election independent negotiations were started by Brougham; and although these were again for the Portarlington seat, they do not seem to have been connected with the previous negotiations of Wakefield.5 The first that Ricardo heard of it was at the end of August 1818, when after a visit of Mill to Gatcomb they went to Gloucester together, where Mill received a letter from Brougham containing a definite offer in connection with the seat. To this Ricardo promptly consented, on ‘the terms proposed’, subject only to his solicitor seeing that ‘all is right and secure’.1 On receipt of Ricardo’s answer Brougham wrote: ‘I have arranged all about Ricardo’. He had seen Sir Henry Parnell and ‘we settled everything as he (R) could wish—The titles will take some little time—but all is sure.’2 The terms were that Ricardo should make a loan of between £20,000 and £36,000 against a mortgage on the Portarlington estates, and should pay £4,000 for the seat ‘secured for four years’ (implying the right of re-election in the event of an early dissolution)3 and in addition ‘a chance of sitting 7 years’ (in case of there being no dissolution and Parliament lasting its full term).4 There seems to have been some misunderstanding as to whether Ricardo was to receive the maximum rate of interest fixed by Irish law (6 per cent) or by English law (5 per cent).5 In the event, the loan was of £25,000 and the interest 6 per cent.6
While Ricardo was not actually seated until February 1819, the delay was not due to the disagreement about terms or to the long drawn-out difficulties over the security for the loan. As Brougham had promised Mill, Ricardo was seated ‘the very first day that the forms of Parliament will admit’,7 or very nearly so. For a new writ could not be issued until the new Parliament had met and the fourteen days allowed for presenting election petitions had expired. Parliament was opened by the Regent on 21 January 1819, and the first writs for new elections in vacant seats were issued on 5 February. The writ for the return of a member for Portarlington, in the room of Richard Sharp who had accepted the Chiltern Hundreds, was issued on 8 February. Ricardo was returned to Parliament on 20 February 1819, and took his seat on the 26th.1
The arrangements for the loan to Lord Portarlington took a long time to complete. When at last all the legal documents seemed to be in order, difficulties arose on account of the encumbrances which had to be removed to give priority to Ricardo’s mortgage: some of the annuitants refusing to be paid off or to assign their annuities. It was not until the autumn of 1820 that these difficulties were finally overcome, and the £25,000 paid over.2
Within a year of this Lord Portarlington was applying to Ricardo for a further loan of £6,000. This was in order to buy another estate, or more precisely, as Ricardo’s solicitor Crosse put it, ‘to replace a sum given by the Honble Mrs. Damer to his Lordship to purchase the estate but which he diverted to another purpose.’ Ricardo seems to have regarded the estates which were already mortgaged to him as adequate security for the additional loan, but Parnell urged that he should take a security on the new estate, ‘as otherwise it will enable his Lordship to Mortgage it and procure a further loan from some other person.’3
At the time of the General Election of 1820, which followed the death of George III, there were reports that Ricardo was to contest the County of Gloucester; but these he denied, saying that he would never have consented to ‘embark on so perilous an undertaking’ as that of contesting a county with ‘an old and powerful family’ (namely, that of the Duke of Beaufort).4 As he wrote to Trower: ‘My late constituents at Portarlington appear to be a very good tempered set of gentlemen, and will I am sure elect me without hesitation to the next Parliament.’1 He was, in fact, returned again for Portarlington on 27 March 1820.2
‘If I could, without much trouble, get into the New Parliament I would’, Ricardo had written to Trower in 1818. ‘I should neither be Whig nor Tory but should be anxiously desirous of promoting every measure which should give us a chance of good government. This I think will never be obtained without a reform in Parliament.’3
His attitude in the House on political questions was summed up after his death by the Globe and Traveller newspaper4 as follows: ‘Mr Ricardo was generally regarded as a moderate oppositionist. He was, however, the most decided and thorough Reformer within the walls of Parliament. With respect to government he had embraced the principles of Bentham. He was invariably found at his post on the Opposition benches, and, on every division, he voted on the side of the people.’ On these subjects his speeches were few, the principal ones being that on Lord John Russell’s motion for a Reform of Parliament on 24 April 1823 and his last speech for Free Discussion of Religious Opinions on 1 July 1823.
It was to economic subjects that most of his speeches were devoted. He entered on his parliamentary career with a considerable reputation as the originator of the currency plan embodied in Peel’s Bill of 1819;5 and on the occasion of his first important speech, which was on the Resumption of Cash Payments, ‘he did not rise until he was loudly called upon from all sides of the House.’1 However, following his proposal of a tax on capital to pay off the national debt, which was regarded as a ‘wild sort of notion’ even by his own friends,2 the attitude of the House towards him underwent some change, and he came to be looked upon as a theorist. As he wrote to McCulloch in the summer of 1820: ‘I am treated as an ultra reformer and a visionary on commercial subjects by both Agriculturists and Manufacturers. Do you not observe that even Mr. Baring, the professed but I think lukewarm friend of free trade, did not nominate me on his committee.’3
With the growing severity of the depression in agriculture his speeches became increasingly concerned with the relation of Peel’s Bill (and of the monetary policy that had followed it) to agricultural distress. Here he frequently found himself on the same side as the Government in his speeches, in repelling the attacks of the country gentlemen who attributed the depression to the effects of that measure and to the burden of taxation. At the same time, he opposed the Ministers when they found a remedy for the situation in protection. In the later years of Ricardo’s parliamentary career there was a gradual transition of the Tory Government towards a more liberal commercial policy, under the auspices of Wallace, Huskisson and Robinson,4 and with it the removal of a number of restrictions on trade; as a result at this stage Ricardo is found speaking more frequently in support of government measures.
It may be noted that shortly before his death Ricardo had promised his friend Joseph Hume that he would assist him in his proposed motion against the laws restricting the emigration of artizans, the exportation of machinery and the combination of workmen. And when Hume introduced the motion on 12 February 1824, he opened his speech with a commemorative passage on Ricardo, with which Huskisson associated himself; this is quoted on p. 332 below.
The record of Ricardo’s votes is necessarily incomplete. At that time (and until 1836) only the numbers in divisions were recorded officially, while the names were ignored. On questions of special interest, however, it was usual for members of the opposition to give their list to the reporters, thus securing publication of their own names in the newspapers and in Hansard.1 During Ricardo’s period in Parliament (from 26 Feb. 1819 to the end of the Session of 1823) Hansard records 224 such opposition lists, and Ricardo appears in 167 of them.2 In a contemporary analysis of the lists of the minorities on 36 questions (selected as being of particular importance) divided upon in the Sessions of 1821 and 1822, Ricardo appears in 28—only six members appearing more frequently.3
These figures probably understate Ricardo’s regularity in attendance, since there were occasions, however rare, when he refrained from voting with the Opposition.4 Of 9 questions on which, exceptionally, both majority and minority lists were recorded in 1821 and 18225 Ricardo appears in all of them on the side of the Opposition, with the exception of one (the vote on the Roman Catholic claims, discussed below) in which he is not included in either list.6
His votes at the end of the debates in which he took part (when known) are as a rule recorded in this volume at the end of each speech. Some of his votes on other occasions are also of interest. His first recorded vote in the House (on 2 March 1819) was in support of Mackintosh’s motion for reducing the number of offences subject to capital punishment; and he voted again for similar motions on 23 May and 4 June 1821 and 21 May 1823.
He also voted for Bennet’s motions for the abolition of punishment by flogging (30 April and 7 July 1823). Throughout the special session called after Peterloo in 1819 he voted against the measures known as the ‘Six Acts’, in addition to speaking against one of them; and later (on 8 May 1821) he voted for the repeal of another, the Blasphemous and Seditious Libels Act. He supported Sir Francis Burdett’s motion, on 16 May 1821, for an investigation into the Peterloo massacre. He voted against the Irish Insurrection Bill on 7 and 8 February 1822 and against its continuance on 8 July of the same year and on 12 May 1823; and he seconded Hume’s motion for abolishing the office of Lord-Lieutenant of Ireland on 25 June 1823. On foreign affairs he voted for Mackintosh’s motion (21 February 1821) on the action of the Powers of the Holy Alliance with respect to the revolution in Naples; for Lord W. Bentinck’s motion (21 June 1821) concerning the affairs of Sicily; and for Hume’s motion (14 May 1822) on the state of the Ionian islands where martial law had been proclaimed. He voted against the Foreign Enlistment Bill (on 3 and 10 June 1819) and against the renewal of the Alien Bill (on 7 July 1820 and again on 1 July 1821).
The fact that Ricardo does not appear in the list of members who voted on Plunket’s motion for the Roman Catholic claims which was adopted on 28 February 1821 (either in the majority or in the minority which in this case are both given) is curious:1 the more so since we know from a letter to Trower that he was present at the debate and that he was unreservedly in favour of the motion.2 Professor Cannan, in his essay on ‘Ricardo in Parliament’, has conjectured that he remained neutral, and asks: ‘Can it have been due to some compact with the power which gave him his seat for Portarlington?’3 It is true that some members for Irish constituencies, in fear of offending their Protestant patrons, refrained from voting for the Catholic claims, or if they voted felt that they did so ‘at the imminent hazard of their seats’;1 and it was in fact the seat of Portarlington which, as we have seen above (p. xv), William Lamb lost in 1812 for supporting Catholic emancipation. All this lends plausibility to Cannan’s suggestion. On the other hand it is clear from what we know of the negotiations by which Ricardo acquired his seat that there were no political conditions attached. The financial situation of Lord Portarlington had disastrously deteriorated since 1812, and Ricardo had been able to negotiate from the strong position of the lender of a large sum. But the decisive consideration is that during the period 1819–1823 Hansard did in fact give on a second occasion the list of those voting for the claims of the Roman Catholics, and Ricardo’s name appears in this list (namely that on Brougham’s motion of 26 June 1823 in support of a petition ‘from the Roman Catholics of Ireland complaining of the Inequality in the Administration of the Law’).2
A more probable explanation is that the omission of Ricardo’s name in the case of Plunket’s motion was due to a mistake in the division list. We have seen above that these lists were entirely unofficial; they were also often inaccurate, and on the occasion in question there were said to have been several omissions.3
While he was in Parliament, Ricardo was a member of several Select Committees, which are listed below. He was appointed to the first of these within a few days of taking his seat, but after that for nearly two years he was not on any other committee. (As we have seen above, Baring refrained from nominating Ricardo for his Foreign Trade Committee in 1820; and although nominated for the Agricultural Committee of 1820, he was not in fact appointed to it.1 ) In his last session, however, we find him so busy with committees every morning that these, together with his regular attendance in the House, (as he wrote to Trower in July 1823)2 ‘fully occupied’ his time.
Poor Law Committee. The Select Committee on the Poor Law was appointed on 9 February 1819. Ricardo was added on 1 March. Chairman, Sturges Bourne. It heard evidence between 19 March and 28 June from 3 witnesses. Reported on 30 June1819. The immediate recommendations of the report were limited to the removal of impediments to ‘the free circulation of labour’ and emigration; it also recommended, however, that ultimately parishes should be freed from ‘the impracticable obligation of finding employment’ for all who need it, and that relief should be confined to those unable to work.
Agricultural Committee 1821. The Select Committee on Petitions complaining of the Depressed State of Agriculture was appointed on 7 March 1821.3 Chairman, T. S. Gooch. Sat for 14 weeks and heard 42 witnesses. Reported on 18 June1821. The examination of the agricultural witnesses ‘was throughout conducted with great ability by Mr Ricardo, Mr Huskisson, and others’, according to the Scotsman (2 June1821). Ricardo’s letters contain many references to this. He ‘worked very hard’ in the Committee4 ‘against a host of adversaries, in the shape of witnesses, as well as members’.5 Regarding one witness, Thomas Attwood, he says, ‘his claims to infallibility have been sifted by Huskisson and myself’;6 and of another, William Jacob, ‘I ... persevered in my questions to him, till I believe he thought me rude’.7 He himself called two merchants as witnesses, Thomas Tooke and Edward Solly.8 The report was drafted by Huskisson9 but considerably altered in Committee in a protectionist direction. Ricardo’s opinion of it will be found below, pp. 151–2, and is summed up in a letter to McCulloch with the words: ‘considering the composition of the committee it is better than could be expected’.1 The report was not debated in the House but referred to the Agricultural Committee of the following year.
A glimpse of what went on inside the Committee is given by two entries in J. L. Mallet’s MS Diary:
‘7 May 1821. Ricardo in the Agricultural Committee. I dined yesterday at Ricardo’s. There was a good deal of conversation upon the agricultural Committee. Ricardo says that they look upon him as a mere Theorist, but that they are very civil and allow him to take his own course with a view of establishing his principles by evidence. As to opinion the Committee is a perfect Babel. There are not two men agreed.
‘10 May 1821. Agriculture Committee. Ricardo is left very much to himself in the Agricultural Committee. Baring who promised to assist him has not taken any share in the proceedings. Huskisson has been of service; and the Government are evidently on his side and wish to resist these greedy and unreasonable Lords of the Soil, as Cobbet calls them; but it is a dangerous task. Lord Londonderry2 spoke yesterday for an hour in the Committee, and Ricardo says that he would have defied any man to have made a tolerable grasp of the real opinion of His Lordship. This is a most happy faculty in Lord Londonderry.’
Agricultural Committee 1822. The Select Committee on the Allegations of the several Petitions presented to the House in the last and present Sessions of Parliament complaining of the Distressed State of Agriculture was appointed on 18 February 1822, largely with the same membership as the Committee of 1821:3 Huskisson although a member did not attend. Chairman, Lord Londonderry. The Committee took no evidence and reported on 1 April 1822. The report which was strongly protectionist gave rise to a prolonged debate in the House which ended in the passing of the new Corn Law (see below, p. 148 ff.). Ricardo discusses this report and contrasts it with that of the Committee of the previous year in Protection to Agriculture, above, IV, 244 ff.
Committee on Public Accounts. The Select Committee on the Public Accounts of the United Kingdom annually laid before Parliament was appointed on 18 April 1822. Chairman, Lord Palmerston. The Committee took no evidence. Reported on 31 July 1822. The report recommended that the accounts should be simplified so as to present as in a balance sheet the income and expenditure of each year. (An attempt had already been made by the Government in this direction at Ricardo’s suggestion; see below, p. 145.)
Committee on Stationery. The Select Committee on the Printing and Stationery supplied to the House of Commons and to the Public Departments was appointed on 14 May 1822. Chairman, Lord Binning. It heard evidence from 54 witnesses. Reported on 30 July 1822. The Committee considered complaints of corrupt practices in the Stationery and Printing Departments and recommended, inter alia, the stamping of all paper used in public offices with ‘a peculiar mark’ to prevent theft.
Committee on Sewers. The Select Committee on the powers vested in and exercised by the Commissioners of Sewers in the Metropolis was appointed on 25 February 1823. Chairman, Peter Moore. It heard evidence from 4 witnesses between 5 March and 19 June. Reported on 10 July 1823, reporting only the evidence, without offering any opinion.
Committee on Law Merchant. The Select Committee on the state of the Law relating to Goods, Wares, and Merchandise intrusted to Merchants, Agents, or Factors was appointed on 15 May 1823. Chairman, John Smith. It heard evidence from 52 witnesses. Reported on 13 June 1823. The Committee’s main recommendation was: ‘That a person possessing a bill of lading, or other apparent symbol of property, not importing that such property belongs to others, shall be considered as the true owner, so far as respects any person who may deal with him, in relation to such property, under an ignorance of his real character.’ (This corresponded with Ricardo’s opinion as expressed in a speech on 12 May 1823, below, p. 293.)
Committee on the Labouring Poor in Ireland. The Select Committee on the condition of the Labouring Poor in Ireland, with a view to facilitating the application of the Funds of Private Individuals and Associations for their Employment in Useful and Productive Labour was appointed on 20 June 1823. Ricardo was added to the Committee on 23 June. Chairman, Spring Rice. It heard evidence from 18 witnesses between 23 June and 4 July. Reported on 16 July 1823. The appointment of the Committee arose from a petition from Ireland, presented on 18 June 1823, praying the House to consider how far ‘Mr. Owen’s plan for the employment of the poor ... could be applied to the employment of the peasantry of Ireland’. The report, while admitting that Owen’s plan might be suitable for private experiment, regarded it as not a ‘fit subject of legislative assistance’. Ricardo comments on the subject of the enquiry in a letter to Trower, below, IX, 313–14.
Parliamentary reporting in Ricardo’s time was something very different from the official shorthand reporting of the present day. The whole business was a private venture of the newspapers, and their reporters had only recently gained even a bare toleration in the House. One cannot form an estimate of the authenticity of Ricardo’s speeches as they have come down to us without some idea as to how they were recorded.
The pioneer in the reporting of debates was the Morning Chronicle, which was founded in 1769 and conducted by William Woodfall. At a time when the taking of notes by strangers in the House was strictly prohibited, Woodfall was enabled by an extraordinary memory to write up a whole debate after listening to it from the Strangers’ Gallery. When in 1789 James Perry took over the editorship from him, he introduced the system of ‘division of labour’: this consisted in employing a team of reporters, each of whom sat in on the debate for a ‘turn’ of three-quarters of an hour and then, on being relieved in the Gallery by a colleague, left to write up his report at the office.1 From that time onwards, even though the system came to be universally adopted, the Morning Chronicle ‘was distinguished by its superior excellence in reporting the proceedings of Parliament.’2
Towards the close of the eighteenth century, when ‘the use of notebooks and pencils by “strangers” was still an unholy sight in the eyes of the Speaker’, the reporters established the practice of taking seats in the back row of the Strangers’ Gallery where, ‘sitting remotely in the shadows’, they could take notes ‘without being observed from the Chair’;1 and a few years later the Speaker acknowledged their right to the exclusive occupation of the back row.2 This position, however, ‘not only did not facilitate their hearing what was said by the members when addressing the House, but exposed them to great annoyance from the talking of the strangers on the five or six rows of seats before them.’3 As late as 1819, ‘they were still forbidden to take notes anywhere save on the back row’;4 and in that year one of the reporters of the Morning Chronicle, Peter Finnerty, was brought to the Bar of the House and reprimanded for having persisted in taking notes while sitting in the front row of the Strangers’ Gallery.5
Apart from these handicaps, there was among the reporters themselves a general prejudice against verbatim reporting. This was based on the idea that shorthand writers are incompetent to report a good speech, because ‘they attend to words without entering into the thoughts of the speaker.’6 At the same time it was held that the reporter taking down a speech in long-hand was obliged to ‘clothe the idea in his own phraseology’ and to endeavour to ‘make the style as correct and elegant as possible.’7 As it has been tersely put, he ‘gave eloquence to the stammerer and concentration to the diffuse’.8
This type of reporting, however, required that ‘the reporter must thoroughly understand the subject discussed, and be qualified to follow the reasoning ... of the speaker.’9 Ricardo’s matter did not easily lend itself to writing-up by reporters, and as he says in a letter to Trower, ‘It is a great disadvantage to me that the reporters not understanding the subject cannot readily follow me—they often represent me as uttering perfect nonsense.’1
The Parliamentary Debates, printed by, and ‘published under the superintendence of’ T. C. Hansard, was also a private concern, and while it had by this time gained a definite ascendancy, short-lived rivals still appeared from time to time.2 Hansard had no reporters of his own, and his publication was compiled by collation of various newspaper reports or from copies supplied by the speakers or published by them in pamphlet form.3 By advertisements in the press and in his own publication he invited the ‘communication’ of speeches for his work.
Hansard however was far from being a complete record: some speeches and even whole debates were not reported in it at all, even though they had appeared in the newspapers. Omissions were no doubt in many cases caused by the inadequacy of newspaper reports and the difficulty of securing better ones, but in others they were probably due merely to the need to limit the size of the volumes.
Two or three volumes of Hansard were devoted to each session, and these appeared after considerable delay: thus the volume containing the debates of the first three months of 1821 was not advertised as ‘ready for delivery’ until nearly a year later; and it was announced that the volume covering the following period, up to the close of the session on 11 July 1821, would be published in October 1822.4
The editor of the Parliamentary Debates since its foundation in 1803 was John Wright. The method by which he proceeded in his work can be seen from a letter which he wrote to Ricardo to obtain a report of his speech of 11 June 1823:
112 Regent Street. August 20. 1823.
As I am very desirous that a correct report of your Speech on Mr Western’s motion should be preserved in The Parliamentary Debates I beg leave to say that I shall be very glad if you could find leisure to furnish me with such report in the course of ten days. I enclose the Newspaper reports which you will find very scanty— so much so, that I think it would be less trouble to write out the whole, than to attempt to correct what is printed. I shall be glad to be favoured with a line on the subject, and am, Sir,
David Ricardo Esq.
Ricardo complied with this request, as appears from the note attached to the speech in Hansard (see below, p. 309).
The way in which Ricardo on a similar occasion used the newspaper cuttings which were sent to him is graphically shown by the facsimile of the original report, which he prepared for Hansard, of his famous speech of 24 May 1819 on the Resumption of Cash Payments (below, facing p. 332).2
So much care in securing a full record from the speakers was apparently used by Wright only for major speeches, and the quality of the rendering in their case is markedly superior to that of the lesser ones. In other cases he probably contented himself with making a compilation from the newspaper reports.
Thus, from the picture that we have of parliamentary reporting at that time, it seems clear that we cannot read Ricardo’s speeches with the same confidence in their authenticity as we can his writings, or even his evidence.1
There is, however, one speech of which we are now able to read Ricardo’s own report, undoubtedly written within a day after the debate; that is the speech on Mr Western’s Motion of 10 July1822.2 The original transcript, hitherto unpublished, was found in the Mill-Ricardo papers and is given in the present volume instead of Hansard’s version, of which it is four times as extensive. This report, having been written by Ricardo himself so soon after delivering it, has an authority unequalled by any others, even by those of which we know, or can guess from their quality, that they were revised by him, since this revision would normally be carried out months later, owing to the delays in the preparation of Hansard. One can therefore take the report of the speech of 10 July 1822 as a standard by which to judge the quality of the others.
In the present edition Ricardo’s speeches have been reprinted from The Parliamentary Debates (referred to throughout as Hansard ).3 However, in every case in which Hansard’s report seemed doubtful for one reason or another, it has been collated with the reports in the newspapers; and whenever one of the latter seemed more plausible, this has been given as an alternative in a footnote. Extensive, though not systematic, collation of a general kind with newspaper reports has also been carried out; and in many cases this has made it possible to add in footnotes passages from the newspapers where these are fuller. Moreover, a dozen of Ricardo’s parliamentary speeches, which have been found in the newspapers but are not reproduced in Hansard, have been included, and the fact noted.4
The titles of the speeches are those given by Hansard to the respective debates. Each of Ricardo’s speeches is introduced by summaries or brief quotations from previous speakers, which indicate the subject of the debate or are referred to by Ricardo. At the end of each speech is given the result of the division, if any, on the question under consideration; and occasionally extracts from subsequent speakers who replied to Ricardo. This and other editorial matter is throughout distinguished by smaller type.
[1 ]Letter of 30 Sept. 1814, below, VI, 138.
[2 ]Below, VI, 240.
[3 ]ib. 252.
[4 ]ib. 263.
[1 ]Below, VII, 85–6.
[2 ]ib. 101–2.
[3 ]ib. 110. The sale of seats had been subjected to heavy penalties by an Act of 1809; this however remained a dead letter till the Reform Act of1832. (See Erskine May’s Constitutional History of England, 3rd ed., 1912, vol. i, p. 233.)
[4 ]Wakefield in a book on Ireland which he had written some years earlier had noted: ‘Portarlington borough has twelve self-elected burgesses. Lord Portarlington is the patron.’ (An Account of Ireland, Statistical and Political, London, Longman, 1812, vol. ii, p. 308.)
[5 ]Afterwards Sir Henry Parnell.
[6 ]Letter to C. Long, in Wellington’s Civil Correspondence and Memoranda (Ireland, 1807–1809), London, 1860, p. 17.
[1 ]Dictionary of National Biography.
[2 ]See Wakefield’s letters to Ricardo of 7 Dec. 1817, 24 Dec. 1817 and 4 Dec. 1818, below, VII, 216, 232 and 346.
[3 ]This was the 2nd Earl of Portarlington (1781–1846). As a Colonel in the Light Dragoons, he had been present at the Battle of Waterloo, where his horse had been shot under him. ‘He did not join his regiment in the field of Waterloo till 7 p.m., though it had been engaged all day, and this, though proceeding apparently from negligence or “severe illness” rather than from cowardice, caused his retirement from the Army.’ He afterwards ruined himself by gaming, racing and ‘other dissipations still more censurable’; and ‘the opulent fortune inherited from a long line of honoured ancestry was nearly exhausted.’ (Complete Peerage, vol. xii, ed. 1945, and Gentleman’s Magazine, Feb. 1846, p. 202.)
[4 ]At first £50,000 had been asked for. (See below, VII, 347.)
[5 ]Below, VII, 216. Cp. Warburton’s letter of 8 July 1818: ‘I understand that in spite of the insecure tenure by which a seat would be held owing to the King’s advanced age, that the usual price, £5000, has been given for being returned during the continuance of the Parliament.’ (ib. 276 and cp. 252.)
[6 ]ib. 217.
[1 ]Below, VII, 347.
[2 ]These included a borough 260 miles from London, with 76 voters ‘who are discontented with their present patron and have deputed a confidential person to London to find one’ (Wakefield to Ricardo, 28 Feb. 1818, ib. 254); also Wootton Bassett (Whishaw to Ricardo, 27 May 1818, ib. 264) and a Cornish borough, and two other seats, ‘the one is a close one, the other with very little doubt of success and without any expense to a Candidate unless he succeeds’ (letters from Thomas Crosse, the solicitor, to Ricardo, 10 and 11 June 1818; MS in Ricardo Papers).
[3 ]Below, VII, 269.
[4 ]ib. 272.
[5 ]Cp. the opening of Wakefield’s letter of 4 Dec. 1818, below, VII,346.
[1 ]Letter to Mill, 8 Sept. 1818, ib. 293 and cp. 359.
[2 ]Quoted in Mill’s letter of 23 Sept. 1818, ib. 300.
[3 ]ib. 355.
[4 ]Below, VIII, 330.
[5 ]See below, VII, 355, 359, 363.
[6 ]This appears from Statements of Account of Ricardo’s solicitors, Bleasdale, Lowless & Crosse, which give the principal of the loan to Lord Portarlington as £25,000 and the half-yearly interest, payable on 1 May and 1 November at Pugert & Co., as £750. (MS in Ricardo Papers.) See also Ricardo’s reference to £250 as the equivalent of 1 per cent. on the loan, below, VII, 359.
A somewhat exaggerated version of this transaction was given by Daniel O’Connell in a speech on Parliamentary Reform on 8 March 1831: ‘Lord Portarlington wanted to borrow 40,000l. or 50,000l. at an interest beyond that which was allowed by the Law of the Land. The sum was lent to him by the late Mr. Ricardo, and Mr. Ricardo accordingly came into that House as the hon. member for Portarlington.’ (Hansard, 3rd Series, III, 201.)
[7 ]Below, VII, 355.
[1 ]See Sharp’s letter to Ricardo, 25 Feb. 1819, in which he instructs him as to the procedure for taking his seat, below, VIII, 17–18.
[2 ]A series of letters to Ricardo from his solicitors, Bleasdale, Lowless & Crosse, dated between 2 Sept. 1818 and 9 Dec. 1820, contain references to these transactions; Statements of Account record the payments. (MS in Ricardo Papers.)
[3 ]Quotations from Crosse’s letter to Ricardo of 6 July 1821; Ricardo’s view on the mortgage is given in a letter to Crosse, dated Wotton under edge, 28 June 1821. (MS copies in Ricardo Papers.) There is no evidence that this additional loan was actually made.
[4 ]Below, VIII, 156 and 162–3.
[1 ]ib. 162. For a proposal made to Ricardo in December 1820 to extend the tenure of his seat, see ib. 327 and 330.
[2 ]In 1822, when there was the prospect of a vacancy at Liverpool (represented at the time by Canning), Ricardo was invited to become a candidate for that constituency. This, however, he declined, declaring himself ‘unfit both for the contest, and for the dignity you would confer on me.’ (See below, IX, 182.)
[3 ]Letter of 22 March 1818, below, VII, 260.
[4 ]16 Sept. 1823.
[5 ]This was passed a short time after Ricardo came into Parliament (not before, as is said in Brougham’s Sketch, below, p. xxxii).
[1 ]McCulloch’s Life and Writings of Mr Ricardo, prefixed to his edition of Ricardo’s Works, 1846, p. xxviii. Cp. below, p. 9, n. 1.
[2 ]See for Brougham, below, p. 56; Grenfell, below, p. 270; Mallet, below, VIII, 147, n.
[3 ]Letter of 13 June 1820, below, VIII, 197.
[4 ]See his speeches in praise of these three Ministers, respectively, below, p. 246, 305, and 248.
[1 ]Erskine May’s Constitutional History of England, 3rd ed., 1912, vol. i, p. 345–6.
[2 ]The total comprises 6 majority lists (when the Government was defeated) and Ricardo is in all these. The figures are based on the tables of contents in Hansard.
[3 ]The Pamphleteer, Vol. xxi (No. xlii, 1823), p. 313 ff. Hume heads the list with 34 divisions.
[4 ]See, e.g., below, p. 123.
[5 ]Analysed in The Pamphleteer, ib. p. 301 ff.
[6 ]On this last question the Ministers were divided.
[1 ]It was noticed at the time by the radical Electors’ Remembrancer (London, Sherwood, 1822) which gives a record of each member’s votes and has this entry on Ricardo(p. 73): ‘Voted for the Queen; one of the patriotic phalanx that supported Mr. Hume. A most excellent member. We do not find his name in the Catholic Emancipation division.’
[2 ]Letter of 2 March 1821, below, VIII, 350–1.
[3 ]Economic Journal, 1894, p. 254; reprinted in his The Economic Outlook, 1912, p. 96–7.
[1 ]Letter of C. W. Wynn, 5 Nov. 1821, in the Duke of Buckingham’s Memoirs of the Court of George IV, 1859, vol. i, p. 218.
[2 ]This division was overlooked by Cannan, possibly because the debate is described in Hansard by the inadequate title of ‘Administration of the Law in Ireland’. Cannan notices another division list on the Roman Catholic question given in Hansard: on this occasion however (30 April1822) only the names of those voting against the Catholic claims are recorded, and as one would expect Ricardo is not among them.
[3 ]The Electors’ Remembrancer of 1822, which has been mentioned above, refers to another member(H. Baring) as having ‘voted for Catholic Emancipation, we believe, though his name is not on the division’ (p. 16); and for three other similar cases of omission, on both sides in the same division, see pp. 11, 25 and 45. Cp. also below, p. 273, n.
[1 ]See below, p. 56, n.
[2 ]Below, IX, 311.
[3 ]See below, p. 86–7.
[4 ]Below, VIII, 369.
[5 ]ib. 358.
[6 ]ib. 370.
[7 ]Below, IX, 87.
[8 ]Below, VIII, 373–4.
[9 ]It was believed in some quarters at the time that Ricardo was a joint author of the report (see Trower’s letter of 22 July 1821, below, IX, 28; also Glasgow Herald, 25 June 1821, quoted by Smart, Economic Annals, 1821–1830, p. 16). For Ricardo’s denial see his reply to Trower, below, IX, 37.
[1 ]Below, VIII, 390; cp. IX, 7–8, 37.
[2 ]i.e. Castlereagh.
[3 ]See below, pp. 129 and 138.
[1 ]See the chapters on Parliamentary Reporting in James Grant’s The Great Metropolis, 1838, 2nd series, vol. ii, p. 200–1 and The Newspaper Press, 1871, vol. ii, p. 169–70; and M. Macdonagh, The Reporters’ Gallery, 1913, pp. 268 and 282.
[2 ]‘The Periodical Press’, in Edinburgh Review, May 1823, p. 363; Cobbett took the same view, since he wrote of another paper (the New Times) that, ‘after the Morning Chronicle’, it contained ‘by far the best report of the speeches in Parliament.’ (Cobbett’s Weekly Political Register, 16 Feb. 1822, p. 388–9.)
[1 ]Macdonagh, op. cit. p. 28
[2 ]ib. p. 309.
[3 ]The Newspaper Press, vol. ii, p. 181.
[4 ]Macdonagh, op. cit. p. 326.
[5 ]18 June 1819, Hansard, XL, 1182–8.
[6 ]Autobiography of Lord Campbell (himself a former reporter), in his Life, ed. by Mrs Hardcastle, 1881, vol. i, p. 106.
[7 ]The Great Metropolis, 2nd series, vol. ii, p. 209.
[8 ]Macdonagh, op. cit. p. 445.
[9 ]Lord Campbell, ib. p. 106.
[1 ]Letter of 5 March 1822, below, IX, 175; cp. VIII, 357.
[2 ]Two of these have been collated. Dolby’s Parliamentary Register (86 numbers, at 2d. each, covering the Session 1819) and Cobbett’s Parliamentary Register (one vol. for the Session 1820). Only the latter has yielded any additions, which are given in footnotes to the speeches.
[3 ]See the evidence of T. C. Hansard, jun. in ‘Report from the Select Committee on Parliamentary Reporting’, 1878, Q. 159–162.
[4 ]Advt. of Hansard, N.S. vols. IV and V, in Scotsman, 2 March 1822.
[1 ]Addressed: ‘David Ricardo, Esq. M.P./Gatcombe Park/Gloucestershire’.—MS in Ricardo Papers. This is the only extant letter from Wright to Ricardo.
[2 ]This manuscript is part of a volume of autographs entitled Twenty two Speeches in Parliament in the handwriting of the Peers and Commoners by whom they were delivered. 1810–1821, which was prepared by J. Wright in 1838 for a collector (Dawson Turner) from ‘copy’ used by the printer of Hansard. (Puttick and Simpson’s sale of the MS Library of the late D. Turner, 6 June 1859, lot 366; Clumber Library sale at Sotheby’s, 16 Feb. 1938, lot 1396.) Ricardo’s manuscript is signed ‘R’ at the end, and compositor’s marks and the editor’s additions can be noticed in various places. The cuttings are from the Morning Chronicle.
[1 ]The minutes of evidence before Committees were taken by shorthand writers appointed by the two Houses of Parliament from 1813 onwards (see Macdonagh, op. cit. p. 439).
[2 ]See below, p. 231.
[3 ]The volumes concerned are XXXIX-XLI and New Series, I-IX (with the exception of III which is entirely devoted to the Queen’s Trial in the House of Lords).
[4 ]On the other hand, some speeches which are reported in Hansard so meagrely (mostly in two or three lines) as to seem trivial have been omitted. The references to these in Hansard are as follows: New Series, I, 1131–2; V, 508, 1207; VI, 794, 1015; VII, 1091, 1504, 1522; IX, 151, 439, 738, 974, 992, 1429, 1438.
David Ricardo, The Works and Correspondence of David Ricardo, ed. Piero Sraffa with the Collaboration of M.H. Dobb (Indianapolis: Liberty Fund, 2005). Vol. 2 Notes on Malthus. Chapter: INTRODUCTION
Accessed from oll.libertyfund.org/title/114/38340 on 2009-10-20
First published by Cambridge University Press in 1951. Copyright 1951, 1952, 1955, 1973 by the Royal Economic Society. This edition of The Works and Correspondence of David Ricardo is published by Liberty Fund, Inc., under license from the Royal Economic Society.
Malthus’sPrinciples of Political Economy appeared early in April 1820.1 While at various times, whether in the form of a new edition of his pamphlet on Rent of 1815 or of a supplementary volume to the Essay on Population which should deal with his views on Agriculture and Manufactures,2 he had been thinking of a more general work on Political Economy, it was only after the publication of Ricardo’s Principles that the project of a separate treatise crystallised. From the first this was intended as an answer to Ricardo; and late in 1817 Malthus was writing to him: ‘I am meditating a volume as I believe I have told you, and I want to answer you, without giving my work a controversial air.’3 In the spring of 1818 he writes to Professor Preévost of Geneva: ‘I am at present engaged in a volume on those subjects in Political Econy. the principles of which do not yet appear to be quite settled and in this I shall advert frequently to Mr Ricardo’s work. I shall not however be ready for the press till next Spring.’4 By August 1818 Malthus had read part of his manuscript to Ricardo;5 and again when he visited Gatcomb Park in December he read to Ricardo ‘some more of his intended publication’.6 The book was actually advertised as being ‘in the Press’ in November 1818.7 But publication was delayed, as Ricardo told Mill in a letter of 28 Dec. 1818, partly because Murray thought the end of the following year would be the most favourable time, ‘and partly, I think, from doubts which he [Malthus] cannot help entertaining of the correctness of his opinions’.1 As the time now fixed for publication approached, Malthus wrote to Ricardo on 10 Sept. 1819: ‘I have been delayed and led away as usual by thoughts relating to the subjects of some of our discussions.... I think I have a fourthor a fifth to write yet; and having composed the different parts at different times and not in their natural order, I have still much to put out and put in, before it will be fit to send to the press.’2
A few months before the book came out, McCulloch, presuming that it would be a defence of Malthus’s views on the Corn Laws, had written to Ricardo: ‘I think that justice will not be shown either to the science or the country, if it be not handled pretty roughly’;3 and a little later he asked Ricardo to send him notes on the book when it was published.4 This Ricardo agreed to do: ‘When I have read Mr. Malthus book I will make known to you my opinion on the passages which will be found in it in opposition to our theory.’5
When in April 1820 the book appeared, Ricardo gave it a first reading—‘rather in haste and after different intervals of time.’6 He explains to McCulloch: ‘I thought of noticing the particular points on which Mr. M and I differ, and to have offered some defence of my opinions, but I should have little else to do but to restate the arguments in my book, for I do not think he has touched them’.7 He expresses disagreement particularly with Malthus’s measure of value (he ‘adopts a measure of value very different from mine, but he no where adheres to it’), and with his doctrine of rent; he considers ‘the most objectionable chapter in Mr. Malthus’ book’ to be ‘that perhaps on the bad effects from too great accumulation of capital’; and accuses Malthus of having misunderstood him regarding improvements on the land (‘he has not acted quite fairly by me in his remarks on that passage in my book which says that the interest of the landlord is opposed to that of the rest of the community’). He adds: ‘At present I feel a real difficulty, for I confess I do not very clearly perceive what Mr. Malthus system is.’1
About three months later (during a stay at Brighton in the second half of July) Ricardo read Malthus’s book a second time, and expressed himself ‘even less pleased with it than I was at first’.2 He writes to Mill from Brighton on 27 July 1820: ‘I have had no books here but Malthus’s and my own. I am reading the former with great attention, and noting the passages which I think deserving of comment. They are more numerous than I expected. If I were to answer every paragraph, containing what I think an erroneous view of the subject on which the book treats, I should write a thicker volume than his own.’3
For a time after he had retired to Gatcomb on 9 August,4 Ricardo was largely occupied in revising his own Principles for edition 3. Two months later, in a letter of 14 Oct. 1820 to Mill (who in the interval had been staying with him at Gatcomb ‘for more than three weeks’),5 he said: ‘I take advantage of every leisure hour to work on my reply to Malthus—I consider it as an agreeable amusement, and say every thing that offers. It will not probably be desirable to publish it—if I do send it forth it will want a great deal of lopping’.6 On 16 November he announces: ‘My notes on Malthus (such as they are) are finished’;7 and a week later he tells McCulloch: ‘I have been employed for some little time in writing notes on Mr Malthus’ last work, which as yet I have shown to no one.... I have, wherever I met with a passageon which I wished to animadvert, quoted the page, and the first few words of the passage, and then have written my short comment.’8 On the next day he informs Malthus: ‘I have made notes on every passage in your book which I dispute, and have supposed myself about publishing a new edition of your work, and at liberty to mark the passage with a reference to a note at the bottom of the page. I have in fact quoted 3 or 4 words of a sentence, noting the page, and then added my comment.’1 (The idea of putting his criticisms in the form of notes to a special edition of Malthus’s work may have been suggested by Say’s treatment of Ricardo’s own Principles in the French edition which had recently been published.)
These letters indicate that the possibility of publishing the Notes had not been entirely ruled out by Ricardo while he was writing them. Just before their completion Mill had offered to advise him about publication (‘I shall be glad, when you have finished your notes...if you will transmit them to me, and give me an opportunity of advising with you; because, the time about which you will most probably come to town, will be the time best for publication’).2 At first Ricardo had entertained the alternative idea of ‘publishing them as an appendix’ to the third edition of his own Principles; but had been ‘strongly dissuaded from it by Mill’.3
However, in asking McCulloch to read the Notes, he disclaims any intention of publication: ‘If the criticism were just, and the principles I advocate correct, still it would not I think be desirable to publish it—first, because Mr. Malthus book, I am told, has not excited much interest, and these dry, and perhaps not very clearly expressed comments upon it, will excite still less.’4 And in a letter to Trower of 26 Nov. 1820 he writes: ‘The whole might occupy about 150 pages if printed. It is not however probable that I shall publish them, because they are not in an inviting form, and would consequently have few readers.’5 McCulloch, after reading the Notes, advised against publication, on the ground that they were ‘by far too controversial’ and in their present shape involved ‘a good deal of tedious and unnecessary repetition’;6 and Ricardo decided ‘for the present’ to ‘do nothing with them’.1 Trower also, some months later, declared them unsuitable for publication ‘in their present shape’.2 Meanwhile Malthus, far from encouraging Ricardo’s idea of an annotated edition, had at once intimated his intention of himself preparing a new edition, and had followed this with an announcement in the press of its impending publication.3 However, a number of changes in edition 3 of Ricardo’s Principles embody material from these Notes.4
Malthus had intended to visit Gatcomb in December 1820 and to see Ricardo’s Notes before revising his own book;5 and in view of this Ricardo refrained from sending the Notes immediately to McCulloch, in order that Malthus should have a chance of seeing them.6 On hearing from Malthus, however, that the visit had to be postponed, Ricardo dispatched them to McCulloch in Edinburgh; and when Malthus a week later (in the middle of December) came to Gatcomb at short notice, the Notes were no longer there for him to see.7 According to Ricardo’s account of the visit: ‘Mr. Malthus and I had a great deal of discussion, and on some points understood each other’s objections better than before, but yet there remains the greatest difference between us.’8 McCulloch kept the Notes several weeks, after which they were seen by Malthus,9 and later by Trower.10 At the end of 1821, they were once more sent to McCulloch at his request.11 There is no record of when they were actually seen by Mill. To Mill’s offer of 13 Nov. 1820 to advise about the best mode of publication Ricardo had replied: ‘I cannot think of imposing on you the task of reading them, particularly as it would be necessary for you to read also the passages in Malthus on which I comment.’12 That at some stage they were read by Mill is shown by the jottings in his handwriting on the MS, quoted below; but these may have been made after Ricardo’s death.
The discussion between Ricardo and Malthus on the Notes, as we have seen, was chiefly carried out in conversation, except for Ricardo’s comments on the possibility of a general glut, which were taken up by Malthus in a letter of 7 July 18211 —a letter which initiated a brief correspondence between them in the course of that month. Meanwhile Malthus proceeded with his plans for a second edition. After his first move in this direction at the end of 1820, which has been mentioned above, he returned to the task two years later, in December 1822, when he wrote to his friend Prévost: ‘I am very anxious to get out as soon as I possibly can another edition of my last work, in which there will be some new views on a standard of value which require a good deal of care and consideration.’2 This however bore fruit, not in a new edition of that work, but in The Measure of Value Stated and Illustrated which he published as a separate pamphlet in 1823. Its publication gave rise to further correspondence with Ricardo which extended over the last months of Ricardo’s life.
It was not till 1836 that a second edition of Malthus’s Principles of Political Economy appeared; it was published posthumously by his friend Bishop Otter,3 Malthus having died in 1834. It is not quite clear what exactly the editor’s part was in preparing the work for publication. He says in the ‘Advertisement’ prefixed to the volume (p. xi) that Malthus had died ‘before he had completed the whole of the alterations which he had in contemplation, and while he was yet occupied in correcting and improving the latter parts of the work’. He acknowledges that he has ‘slightly varied’ the text in some places, and omitted ‘some passages’.
The changes in this edition are extensive, but in general they do not appear to be carried out with a view to meeting Ricardo’s criticisms. Indeed, they seem rather to be on the defensive against a new generation of critics who linked Malthus in their attacks with Ricardo.
There is thus some indication, firstly that Malthus was engaged on revisions for a second edition in the years 1820 to 1822, and secondly that he carried out another revision in the closing years of his life. We are able to find confirmation of this from Malthus’s working copy of his Principles of Political Economy, 1820, with numerous alterations mostly in his own handwriting which has been preserved.1 These alterations fall into two clearly distinct parts: (a) corrections extending over the first two-thirds of the book and written in the margin or on slips inserted, and (b) a set of 17 pages of MS, consisting of a revision of parts of Chapter II, mainly of Section VI, ‘Of the Labour which a Commodity will command, considered as a Measure of real Value in Exchange’.
As compared with the published second edition, the changes in (a) appear to be much more connected with the controversy with Ricardo in the early ’20’s. Thus it is significant that the most extensive revisions in (a) are in Section V of Chapter II (‘Of Money, when uniform in its cost, considered as a Measure of Value’), which is the second of the sections devoted to a discussion of the measure of value proposed by Ricardo; whereas the second edition omits this section altogether. There are other indications of the period to which (a) belongs. In particular, a footnote to a passage inserted at page 261 refers to the date of publication of ‘the quarto edition of the Essay on Population’ (which was 1803) as ‘nearly twenty years ago’. This footnote occurs in the second edition, p. 235, altered to ‘above thirty years ago’. Also, such inserted slips of paper in (a) as have dated watermarks bear the dates 1819, 1820 and 1822. Thus it would appear that (a) belongs to the period of the abortive preparations for a new edition between 1820 and 1822.
As regards (b), however, such of its pages as have dated water-marks belong to 1828; while in one place on the MS a reference to ‘the time of George IV’ is changed to ‘William IV’.1 Thus these pages must have been written between 1828 and 1830.
While some of the corrections in (a) have found their way into the second edition, the differences are very considerable. It is, therefore, clear that the revision mentioned by Otter, and embodied in the published second edition, cannot be (a) unless Otter himself carried out a more extensive work of revision than he acknowledged. On the other hand (b), most of which is embodied in the second edition with comparatively slight changes,2 evidently belongs to Malthus’s final revision.
For almost a century the Notes disappeared from sight. McCulloch, in the early versions of his Life and Writings of Mr. Ricardo,3 had said: ‘He also left very full “Notes” on Mr. Malthus’s Principles of Political Economy, which we trust will be published. They contain a most able vindication of his own doctrines from the objections of Mr. Malthus, and an exposition of the mistakes into which he conceives Mr. Malthus has fallen.’ But in the later versions of the Life (such as that prefixed to his own edition of Ricardo’s Works, 1846) he replaced the phrase, ‘which we trust will be published’ with the sentence: ‘But we doubt whether they have sufficient interest to warrant their publication’.4
It was only in 1919 that the MS came to light. The discovery was made by Mr Frank Ricardo, a great-grandson of the economist, at Bromesberrow Place, Ledbury (formerly the residence of Ricardo’s eldest son Osman), who describes it as follows in a letter of 28 Oct. 1925 to Professor J. H. Hollander: ‘It was, I think, in the autumn of 1919—or may be the spring—that I was going through some furniture stored in the lumber room at Bromesberrow, and I came upon this MS. wrapped in brown paper and casually put away in a box together with some old ornaments. I recognized it as an original MS. of David Ricardo but whether it had been published I did not then know.’1 The find was reported by Mr Frank Ricardo to the British Museum, which communicated with Professor T. E. Gregory; and the Notes were published in 1928, with a lengthy introduction by Professor Hollander and short summaries of the relevant parts of Malthus’s text prefixed to each Note and prepared by Professor Gregory.2 Acknowledgement is due to the editors and to the publishers, The Johns Hopkins Press, for permission to use their edition.
The MS consists of a title-page and 222 loose sheets (as counted by Hollander) cut to a size of about 4¾ 7¾ inches. They are written by Ricardo on both sides, and were numbered first in pencil on one side only from 1 to 199. These numbers were superseded by a final pagination in ink on both sides of the paper from 1 to 412. Pages were added or taken out at various stages of composition, resulting in duplications and omissions in both paginations. Thus in the ink pagination there are intermediate pages numbered 147½, 148½, 167½, 167½, etc. and in some cases there are pages without a number. There are also frequent insertions on smaller slips, some of them loose and some stuck on to the page with wafers.
The MS is cased in two cardboard book-covers which from their size and colour (blue and buff) may have been taken from a copy of Malthus’s book. On the inside of one of the covers there are some pencil notes in James Mill’s handwriting.1
The method adopted in the present edition follows Ricardo’s hint (when he ‘supposed’ himself ‘about publishing a new edition’ of Malthus’s work):2 namely, of giving Malthus’s text at the top and Ricardo’s Notes at the bottom. This also conforms to Professor Cannan’s idea, when he criticised the Hollander-Gregory edition: ‘What was really wanted was a reprint of Malthus’s book with Ricardo’s notes added, each in its proper place at the foot of the page’.3
Larger type has been used for Ricardo’s Notes than for Malthus’s text. Consecutive numbers have been given to the Notes; and these have been inserted in bold type at the end of each passage commented upon. In the first three of the Notes Ricardo gives an indication of the end as well as the beginning of the passage in question. But in subsequent Notes only the beginning is quoted in the MS, so that the correct position of the reference number in the text is in some cases uncertain and has had to be guessed.
In distributing Ricardo’s commentary under Malthus’s text, an ‘opening’ (i.e. two pages facing one another) has been treated as a single page, and as a result a Note may sometimes be found on the opposite page to its reference in the text.
The page-numbers of the original edition of Malthus have been reproduced in the margin. This has made it possible for Ricardo’s references to those pages to be retained unchanged. On the other hand, Malthus’s page-references to Ricardo’s Principles (which in the original are to Ricardo’s edition 2) have been adjusted to the pagination of Volume I of the present edition and enclosed in square brackets.
As a rule the text of Malthus has been given in full. Only such portions of the text as are not relevant, even indirectly, to Ricardo’s commentary have been cut1 and replaced by the corresponding parts of the very extensive ‘Summary of the Contents’ given by Malthus at the end of his book (where it occupies 70 pages). These parts have been enclosed in square brackets, and can be recognised at a glance by the quick succession of page-numbers in the margin. (It is to be noted that the position of these in such cases can only be approximately correct.)
Malthus’s original Index has been included, with its page-references adapted to the present edition.
The editor’s footnotes to Ricardo’s commentary are distinguished by numbers and by generally being arranged in double column (while Malthus’s footnotes to his own text are marked by asterisks and extend across the page). They give all the corrections in the MS which seemed to be of any possible interest, however remote. The various changes made by Ricardo are indicated by the use of the formulas ‘replaces’, ‘del.’ (for deleted) and ‘ins.’ (for inserted). These terms describe successive stages in the expression of Ricardo’s thought as can be inferred from study of the MS. They do not, however, describe the form in which the alterations were carried out. Thus ‘replaces’ may alternatively indicate: (1) the crossing out of a passage and the rewriting of it between the lines; (2) the recasting of it by adding and removing words here and there; and (3) the copying out of a long passage (sometimes of more than one page) in the course of which alterations were made in the expression. The fact of the sheets being written on both sides involved, whenever a passage had to be added, recopying of all the matter that followed on the same sheet.
The spelling, punctuation and abbreviations of Ricardo’s MS have been retained, except for ‘&’ which has been spelt ‘and’, and Mr., Mrs. and Dr., which have been printed in the more usual form of Mr., Mrs. and Dr. The opening quotations of each Note, which in the MS are in quotes, have been given instead in italics.
The present volume has been printed, for Malthus’s text, from the first edition of 1820 and, for Ricardo’s Notes, from a copy of the Hollander-Gregory edition which was corrected by collation with the original MS a number of times both by editor and printer. Consequently, although attention has not been drawn specifically to the errors which abound in that edition and often distort the sense, the reader can be assured that, where a different reading is given in the present volume, this has not been done without consideration of the alternative version.
This volume, with its special typographical difficulties, has been dependent even more than the others upon the skill and ingenuity of the printers of the Cambridge University Press.
[1 ]It was advertised in the Monthly Literary Advertiser of 10 April 1820 as ‘just published’, price 15s.
[2 ]Below, VII, 26–7.
[3 ]Letter from Malthus 3 Dec. 1817, ib. 215; and cp. letter of 12 Oct. 1817, ib. 194.
[4 ]Letter of 30 March 1818, published by G. W. Zinke in Journal of Economic History, May 1942, vol. ii,p. 178.
[5 ]Ricardo to Malthus, 20 Aug. 1818, below, VII, 284.
[6 ]Ricardo to Mill, 22 Dec. 1818, ib. 372. Another chapter was shown to Ricardo while the book was in the press (below, VIII, 173).
[7 ]In the Monthly Literary Advertiser of 10 Nov. 1818; see below, VII,329.
[1 ]Below, VII, 379–80 and cp. 376.
[2 ]Below, VIII, 64, 66.
[3 ]Letter of 5 Dec. 1819, ib. 138–9; cp. also 167.
[4 ]Letter of 2 April 1820, ib. 176.
[5 ]Letter to McCulloch, 8 April 1820, ib. 177–8.
[6 ]Letter to McCulloch, 2 May 1820, ib. 183. Curiously, two days later he writes to Malthus that he has read his book, ‘with great attention’ (ib. 183).
[7 ]ib. 180.
[1 ]ib. 180–2. Cp. also letter to Malthus, 4 May 1820, ib. 183–6.
[2 ]Letter to McCulloch, 2 Aug. 1820, ib. 215.
[3 ]ib. 212.
[4 ]ib. 230.
[5 ]ib. 231.
[6 ]ib. 283.
[7 ]Letter to Mill, ib. 296.
[8 ]ib. 297–8.
[1 ]Below, VIII, 301.
[2 ]Letter to Ricardo, 13 Nov. 1820, ib. 292–3.
[3 ]Ricardo to Trower, 14 Jan. 1821, ib. 333. Mill’s dissuasion no doubt had been during his visit to Gat-comb in August-September 1820.
[4 ]ib. 298.
[5 ]ib. 305.
[6 ]Letter from McCulloch, 22 Jan. 1821, ib. 340.
[1 ]Letter to McCulloch, 25 Jan. 1821, ib. 342.
[2 ]ib. 395.
[3 ]Letter from Malthus, 27 Nov. 1820 (ib. 308) and Murray’s advertisement in the Monthly Literary Advertiser, 10 Jan. 1821 (ib. 341).
[4 ]See above, I, Introduction, section vii.
[5 ]Below, VIII, 308.
[6 ]ib. 314–5.
[7 ]ib. 318, 324, 334.
[8 ]Letter to McCulloch, 17 Jan. 1821, ib. 336.
[9 ]Ricardo writes on 2 March 1821: ‘Mr. Malthus has now had my notes for 5 weeks’ (ib. 349); and Malthus still had them on 25 April (ib. 373).
[10 ]ib. 393.
[11 ]Below, IX, 135, 138.
[12 ]Below, VIII, 296.
[1 ]Below, IX, 9 ff.
[2 ]Letter of 23 Dec. 1822, in Journal of Economic History, vol. ii,p. 188.
[3 ]‘Second Edition with Considerable Additions from the Author’s Own Manuscript and an Original Memoir’, London, Pickering, 1836.
[1 ]This copy has recently (1949) been presented to the Marshall Library of Economics at Cambridge by Mr R. A. Bray, of Shere, a descendant of Malthus’ sister. The Marshall Library has also the original MS of a large part of the first edition (acquired in 1944).
[1 ]This significant correction was pointed out by Dr Bonar, who first studied this copy of Malthus’s book and called the editor’s attention to its existence.
[2 ]These passages are on p. 87, p. 93 and pp. 95–109 of the second edition.
[3 ]Edinburgh Annual Register for 1823 and the pamphlet Memoir of the Life and Writings of David Ricardo, London,1825.
[4 ]In his Literature of Political Economy, 1845, McCulloch in a note on Malthus’s Principles also referred to Ricardo’s Notes: ‘Mr. Ricardo left a manuscript volume of observations on this work, principally in reply to the interminable criticism of Mr. Malthus on his peculiar doctrines.’(p. 18.)
[1 ]Quoted in Hollander’s Introduction to Notes on Malthus, 1928, p. xi.
[2 ]Baltimore, The Johns Hopkins Press, 1928, pp. cviii, 246.
[1 ]They are as follows:
‘p. 349 On subdivision of property among children.372 Foreign trade does not augment value.137 Rent comes all out of profits.
154 Reduction in cost of production never goes to rent.’
The references are to the ink pagination of the MS and correspond to pp. 386, 402, 157, 187 below.
[2 ]Above, p. ix-x.
[3 ]Economica, Nov. 1929, p. 358.
[1 ]The omitted portions amount to rather less than a third of the original.
David Ricardo, The Works and Correspondence of David Ricardo, ed. Piero Sraffa with the Collaboration of M.H. Dobb (Indianapolis: Liberty Fund, 2005). Vol. 1 Principles of Political Economy and Taxation. Chapter: INTRODUCTION
Accessed from oll.libertyfund.org/title/113/38236 on 2009-10-20
Summary.I. The Writing of the Principles, p. xiii. II. James Mill’s Contribution, p. xix. III. Arrangement and Subdivision, p. xxii. IV. The Chapter On Value in Edition 1, p. xxx. V. Principal Changes in Chapter On Value in Eds. 2 and 3, p. xxxvii. VI. Edition 2, p. xlix. VII. Edition 3, p. liii. VIII. The Present Edition, p. lx.
The plan from which the Principles of Political Economy, and Taxation originated had taken shape soon after the publication of the Essay on the Influence of a Low Price of Corn on the Profits of Stock in February 1815. At first Ricardo’s intention (at James Mill’s suggestion) had been merely to produce an enlarged version of the Essay. As he writes to J.-B. Say from his country house, Gatcomb Park, in August 1815: ‘Mr. Mill wishes me to write it over again at large’, adding immediately, ‘I fear the undertaking exceeds my powers’.1 Mill, however, as he tells Ricardo in the same month, is determined to give him no rest till he is ‘plunged over head and ears in political economy.’2 Six weeks later (on 10 October) the larger book is already being treated by Mill as a definite commitment: ‘I expect you are by this time in a condition to give me some account of the progress you have been making in your book. I now consider you as fairly pledged to that task.’3 On the 29th of the same month Ricardo is writing to Trower of his determination to ‘concentrate all the talent’ he possesses upon the subject on which his opinions ‘differ from the great authority of Adam Smith, Malthus &c.a’, namely ‘the principles of Rent, Profit and Wages’. ‘For my own satisfaction I shall certainly make the attempt, and perhaps with repeated revisions during a year or two I shall at last produce something that may be understood.’1 On 9 November we find Mill, in reply to a discouraged letter from Ricardo (‘Oh that I were capable of writing a book!’2 ), assuming the role of ‘schoolmaster’ and commanding Ricardo ‘to begin to the first of the three heads of your proposed work, rent, profit, wages—viz. rent, without an hours delay’.3
Throughout this period Ricardo was held back by difficulties of composition. As he later complained to Malthus, ‘I make no progress in the difficult art of composition. I believe that ought to be my study’.4 Trower’s help consisted in the not very practical advice to consult Dr Blair’s Lectures on Rhetoric and Belles Lettres.5 Mill, however, sent detailed instructions for the writing of the ‘opus magnum’;6 by 22 December 1815 he is waiting ‘in anticipation of the MS’ which he expects ‘soon to receive, as part of the great work’; and in giving further instruction as to the mode of writing he insists always that Ricardo should consider his readers ‘as people ignorant of the subject’. Mill also sets him a ‘school exercise’: to give a proof, step by step, of the proposition which he (Ricardo) had often stated, ‘That improvements in agriculture raise the profits of stock, and produce immediately no other effects.’ ‘For as you are already the best thinker on political economy, I am resolved you shall also be the best writer.’7
It is remarkable that in these letters of October and November 1815 which give the main headings of the proposed work (Rent, Profit, Wages) there is no reference to Value. This is mentioned for the first time, as a separate subject with which it occurred to Ricardo that he would have to deal, in a letter to Mill of 30 December. ‘I know I shall be soon stopped by the word price,’ he writes, ‘and then I must apply to you for advice and assistance. Before my readers can understand the proof I mean to offer, they must understand the theory of currency and of price.’8 From this time onwards the problem of Value increasingly troubled him. On 7 February 1816 he writes to Malthus: ‘If I could overcome the obstacles in the way of giving a clear insight into the origin and law of relative or exchangeable value I should have gained half the battle.’1
In February 1816 he moved to London, whither he brought his papers, some of which he read to Mill while he was there.2 But in town the work made no progress. ‘I may continue to amuse myself with my speculations, but I do not think I shall ever proceed further. Obstacles almost invincible oppose themselves to my progress, and I find the greatest difficulty to avoid confusion in the most simple of my statements.’3 A month later he is writing: ‘My labours have wholly ceased for two months;—whether in the quiet and calm of the country I shall again resume them is very doubtful.’4
In July, back at Gatcomb, he resumed work; having (as he writes to Mill) ‘little temptation to desert my work for the pleasure of walking or riding, as the weather has been almost uniformly bad’, yet not able ‘wholly to seclude myself’.5 But although Ricardo’s letters continued ‘so much in the old desponding tone’,6 by the middle of August Mill could infer that he must have by that time ‘a pretty mass of papers, written first and last upon the subject’: papers which Mill asked to have sent to him, arranged by subjects if possible, with ‘some indication of what each subdivision is about’, or else ‘higgledy-piggledy all together’.7 Despite Mill’s insistence, Ricardo delayed sending the manuscript for two months, under the pretext that he must copy it out.8 Eventually, on 14 October 1816 he sent an extensive draft, covering the ground of the first seven chapters, or the whole of the ‘Principles of Political Economy’ proper; adding in the letter to Mill in which he announced their despatch, ‘I shall now consider the subject of taxation’.9
The real reason for the delay was that he had ‘been very much impeded by the question of price and value’ (as he wrote to Malthus),10 and that (as he informed Mill) he had ‘been beyond measure puzzled to find out the law of price.’ ‘I found on a reference to figures that my former opinion could not be correct and I was full a fortnight pondering on my difficulty before I knew how to solve it.’1 This important change was evidently connected with the ‘curious effect’ (to which he called Mill’s attention in the same letter) of a rise of wages in lowering the prices of ‘those commodities which are chiefly obtained by the aid of machinery and fixed capital’.2
A letter from Mill of 18 November 1816 written immediately after reading the MS and making ‘marginal contents’ for his own use, enables us to reconstruct the contents of that MS with the help of the text of the first edition; for Mill’s comments touch on the main topics in the order in which they were treated under four heads.3
1. ‘Your explanation of the general principle that quantity of labour is the cause and measure of exchangeable value, excepting in the cases which you except, is both satisfactory, and clear.’
2. ‘Your exposition and argumentation to shew, in opposition to A. Smith, that profits of stock do not disturb that law, are luminous. So are the exposition and argumentation to shew that rent also operates no such disturbance.’
Up to this point Mill finds the argument ‘clear, and easily understood’. He continues his comments on the MS as follows:
3. ‘At page 79 you begin the enquiry concerning the causes of alterations in the state of wages; and from this to p. 105, I think the topics are somewhat mixed together...I consider the inquiry in these pages as an inquiry not into the causes of change in the rate of wages alone, but the causes of changes in the wages, profits, and rent all together.’ This is undoubtedly the part which underwent the greatest alteration before publication; and probably included discussion of that ‘curious effect’ which had cost Ricardo so much time and thought during the summer and which eventually appeared in the chapter On Value in edition 1. Ricardo no doubt had these pages in mind when he wrote to Mill: ‘They are worse than they otherwise would be in consequence of my becoming better acquainted with the subject as I have proceeded. Much of what is said in the beginning should be left out or altered to agree with what I think the more correct views which I afterwards adopted.’1
4. Mill goes on to deal with ‘the inquiry concerning foreign trade, which commences at p. 106, and continues to the end’. The propositions which he mentions are: ‘That foreign trade augments not the value of a nations property: that it may be good for a country to import commodities from a country where the production of those same commodities costs more, than it would cost at home: that a change in manufacturing skill in one country, produces a new distribution of the precious metals’.
Of the four parts of this draft all but the third can easily be identified in the Principles in a form which, from its agreement with Mill’s description, appears to be substantially unchanged in the first edition.
Thus the first part, consisting of the statement of the law of value, with its exceptions (rare statues, etc.), will be found below, p. 11 top. 22.
Of the second part, the statement in opposition to Adam Smith that the law is not disturbed either by the payment of profits or by the payment of rent appears in the passage of edition 1 given below, p. 22–3, note 3; the full argument regarding profits is on pages 22 to 26 (first paragraph) in the chapter On Value; that regarding rent is on pages 67 to 78 (first paragraph) in the chapter On Rent.2
And of the fourth part (the enquiry into Foreign Trade) the points noted by Mill will be found, in the same order, as follows: (a) that Foreign Trade does not add to value, below, p. 128 to p. 133 (second paragraph); (b) the theory of comparative costs, below, p. 133 top. 137 (first paragraph); (c) the redistribution of the precious metals following a change of skill in one country, below, p. 137 to p. 141 (third paragraph). This covers rather more than half of the chapter On Foreign Trade in the Principles.
On the other hand, the enquiry into wages (occupying page 79 to page 105 of the MS draft), which Mill considered confused with the enquiries into profits and rent, has no exact counterpart in the published work. No doubt the material which it contained, greatly expanded, was partly embodied in the chapter On Value and for the rest distributed over the chapters On Natural and Market Price, On Wages and On Profits.
Having despatched the first parcel of MS and having set to work on taxation, Ricardo by 17 November 1816 had completed and sent to Mill the ‘inquiry into the subject of Taxation’ (as Mill described it).1 This part, Mill thought, would require more work than the first one before it was ready for the press: ‘you have followed the order of your own thoughts,’ and the matter would need re-arrangement so as ‘to facilitate introduction into the minds of your readers’.2
Up to this point what Ricardo had done was (as he wrote to Malthus) ‘rather a statement of my own opinions, than an attempt at the refutation of the opinions of others’.3 Having finished taxation, he proceeded ‘to read Adam Smith once more, to take note of all passages which very much favor, or are directly opposed to my peculiar opinions’;4 he also re-read Say’s Traité d’Économie politique and Buchanan’s commentary on the Wealth of Nations and made notes of his own criticisms.5 These criticisms formed the basis of the group of controversial chapters which follows the chapters on taxation. Finally, at the end of January he read again Malthus’s pamphlets on rent and corn, and early in March, while printing was in progress, he sent to Malthus the MS of his last chapter, which contains his comments upon them.6
The printing of the Principles began at the end of February 1817. At first it went on briskly at the rate of a sheet a day, as Ricardo wrote to Malthus, and by 9 March eleven sheets, out of a total of thirty-eight, had been corrected.7 In the Monthly Literary Advertiser of 10 March it was included in Murray’s list of works ‘in the Press’. On 26 March, when Ricardo put the last part of his manuscript into the printer’s hands, he complained that the latter did ‘not proceed regularly at the same even pace’.1 But he still hoped that it would be out on Monday, 7 April, which appears to have been the date originally fixed for its appearance.2 However, publication was delayed, and the final date was announced in The Day and New Times of Wednesday, 16 April, where the book was advertised by Murray under the caption, ‘On Saturday will be published’. The date was confirmed in the same paper of Saturday, 19 April, with an advertisement opening ‘This Day will be published’ and giving the price, 14s. Since Trower on 28 April wrote to Ricardo from Godalming thanking him for the book ‘which arrived a few days ago’,3 it could not have been sent much later than the 19th. We can therefore take this (19 April 1817) as the date of publication.
John Stuart Mill says in his Autobiography that Ricardo’s Principles ‘never would have been published or written, but for the entreaty and strong encouragement of my father; for Ricardo, the most modest of men, though firmly convinced of the truth of his doctrines, deemed himself so little capable of doing them justice in exposition and expression, that he shrank from the idea of publicity’.4 In a similar strain the obituary, probably written by Ricardo’s brother, says that he was ‘very reluctant, first to write, and afterwards to publish this work; and it was only by the successive urgings of some of his most confidential friends, but particularly through the influence of Mr. Mill, that he was at length prevailed upon to do so.’5 These statements, if they are taken to refer to James Mill’s influence in stimulating and encouraging Ricardo, are fully borne out by the correspondence between Ricardo and Mill.1 Nevertheless, they are open to misunderstanding. For they have given rise to the view, first advanced by Professor Dunbar, that ‘Ricardo’s book was written, not for the public eye, but as a statement of opinions made for his own purposes, and that its publication was an afterthought of his friends.’2 Through its acceptance by Marshall3 this belief has gained general currency. The Ricardo-Mill correspondence now makes it certain that this opinion is unfounded, and that from the very beginning the idea of publication was present in Ricardo’s mind, although from time to time he was beset by doubts as to his ability to achieve his object (as has been shown in several passages quoted above). A typical statement is the following which he made in a letter to Mill when he was in the middle of composition in November 1816: ‘I have an anxious desire to produce something worth publishing, but that I unaffectedly fear will not be in my power.’4
At the same time it is clear that Mill’s contribution to the making of the Principles was less than might have been expected from his promises and encouragement. On the theory there is little doubt that his influence was negligible; he had been out of touch with Political Economy for some time5 and his letters to Ricardo contain little discussion of theoretical issues. Mill’s letters of this period are full of advice relating to ‘the art of laying down your thoughts, in the way most easy of apprehension’.6 But despite his repeated assurances that he would see to the order and arrangement (‘if you entrust the inspection of it to me’1 ) it seems likely that in the main the sequence of topics was left as Ricardo had originally worked through them. In detail however Mill probably did a good deal of work. Here and there a phrase unmistakeably characteristic of Mill (such as ‘It is a truth which admits not a doubt’,2 ‘the nature of the evil points out the remedy’,3 or ‘none but the prejudiced are ignorant of its true principles’4 ) provides evidence of his hand. His touch can also be recognised in the polished wording of the Preface5 and in the long passage on the ‘pernicious tendency’ of the poor laws.6
Among Mill’s more humble tasks was probably the compilation of the Index, which in method and clarity of expression is strikingly similar to the Index of his History of British India, published later in 1817. It is noticeable that several entries exhibit misunderstanding of the text or radical change of emphasis such as to suggest that they cannot be by the author of the book.7 At any rate contemporary critics of Ricardo seized upon the contrast between the language of the text and that of the Index, to the disadvantage of the former. Thus, one of them says that Ricardo ‘relied for a correction of his deficient perspicuity on his Index, which is clear and minute’.8 Another, Samuel Bailey, notes: ‘the only place in Mr. Ricardo’s work, where I have been able to find the expression of the general rule properly qualified, is the Index. He there says, “the quantity of labour requisite to obtain commodities the principal source of their exchangeable value.”’1
The accurate yet free translation of the passages quoted from Say is probably also due to Mill, who had advised against quotation in French.2
Thus Mill’s promises that, once Ricardo had set down his thoughts on paper, he himself would attend to their proper arrangement may in the event have fallen short of fulfilment. In any case, the result is not such as to do much credit to Mill’s passion for system; and the apparent defects in the arrangement of the work as a whole have often been noted by Ricardo’s critics.3
This arrangement was the direct result of the manner in which Ricardo proceeded in his work. As his letters show, he wrote according to the sequence of his own ideas, without any more elaborate plan than was implied in the heading, ‘Rent, Profit and Wages’. Mill, indeed, had instructed him to ‘proceed, without loss of time... thinking nothing of order, thinking nothing of repetitions, thinking nothing of stile—regarding nothing, in short, but to get all the thoughts blurred upon paper some how or another’.4 ‘When we have the whole before us, we will then lay our heads together, to see how it may be sorted and shaped to the best advantage.’5 The three parts in which Ricardo composed it and which he sent separately to Mill correspond to the three groups into which the chapters of the published work naturally fall: the Political Economy, Taxation and the polemical chapters at the end. The arrangement would have been less open to criticism if this division had been made explicitly by means of separate headings. Mill indeed at an early stage had expected such a division to be made, as is shown by a footnote in his History of British India, 1817, where he refers to the group of Ricardo’s chapters dealing with taxes as ‘a Dissertation on the Principles of Taxation’.1 And Ricardo in a letter to Mill of the same period (December 1816) describes that part of the book to which most of his criticisms of Adam Smith were to be relegated as ‘the appendix’.2
However, within each of the first two parts the order of the chapters coincides closely with the order in which the topics are treated in the Wealth of Nations, as comparison of the chapter-headings shows (see table on the following page).
The only important difference is in the place given to Rent, which was dictated by the necessity for Ricardo of ‘getting rid of rent’ (as he put it), in order to simplify the problem of the distribution between capitalist and labourer.3 As a result, unlike Adam Smith, he deals with Rent immediately after Value and before Wages and Profits.
The parallel applies equally to Taxation (see table on p. xxv).
This group of chapters on taxation is followed by Chapter XVII, On Sudden Changes in the Channels of Trade (numbered XIX in ed. 3), the position of which is determined by its arising immediately out of the subject of the removal of capital from one employment to another, discussed at the end of the chapter on Poor Rates.4 The third, and last, group consists of the chapters commenting upon various doctrines of Adam Smith and other writers, forming ‘the
|Adam Smith, Book i||Ricardo, Ed. i|
|1 This is treated by Ricardo in the Chapter on Value, in the five paragraphs which were later to constitute Sectiii of this chapter; below, pp. 20–2.|
|Ch. v Of the real and nominal Price of Commodities||Ch. i On Value|
|Ch. vi Of the component Parts of the Price of Commodities|
|Ch. ii On Rent|
|Ch. iii On the Rent of Mines|
|Ch. vii Of the natural and Market Price of Commodities||Ch. iv On Natural and Market Price|
|Ch. viii Of the Wages of Labour||Ch. v On Wages|
|Ch. ix Of the Profits of Stock||Ch. v* On Profits|
|Ch. x Of Wages and Profit in the different Employments of Labour and Stock1|
|Ch. xi Of the Rent on Land|
|Ch. vi On Foreign Trade|
appendix’ or a series of critical excursuses, with little connection each with the other.
It was only after the whole was written that thought was given to the question of subdivision. As late as 16 December 1816, after receiving the MS both of the Political Economy and of Taxation, Mill asks: ‘And how would you arrange it in Chapters and Sections? Think of your Chapters and Sections; and when you have made out a list send it to me’.1 To this Ricardo replies: ‘as for the division into chapters, and sections, I am greatly afraid that I shall be unequal to it.’2
Thus the process of cutting up the undivided work into chapters began after writing was completed; indeed, it went on while the printing was in progress, and the last cut was made after the book had actually been printed off. As we shall presently see it is by this late subdividing that the puzzling anomaly of ed. 1, namely the
|Adam Smith, Book v, Ch. ii, Part ii||Ricardo, Ed. i|
|Of Taxes||Ch. vii||On Taxes|
|Ch. viii||Taxes on Raw Produce|
|Art. 1st||Taxes upon Rent||Ch. viii*||Taxes on Rent|
|Taxes upon Rent of Land|
|Taxes which are proportioned, not to the Rent, but to the Produce of Land||Ch. ix||Tithes|
|Ch. xi||Taxes on Gold|
|Taxes upon the Rent of Houses||Ch. xii||Taxes on Houses|
|Art. 2d||Taxes upon Profit, or upon the Revenue arising from Stock||Ch. xiii||Taxes on Profits|
|Taxes upon the Profit of particular Employments|
|Art. 3d||Taxes upon the Wages of Labour||Ch. xiv||Taxes on Wages|
|Art. 4th||Taxes . . . upon every different Species of Revenue|
|Taxes upon Consumable Commodities||Ch. xv||Taxes upon other Commodities than Raw Produce|
|Ch. xvi||Poor Rates|
double numbering of chapters, can be explained; and not, as it would be natural to suppose,1 by the insertion of additional matter as an afterthought. Of this double numbering there are two instances.
The first instance is that of the chapters On Wages and On Profits, both of which are headed ‘Chapter V’. In the table of contents, however, while the former is numbered ‘V’, the latter appears as ‘V*’. It is unlikely that this duplication was in the MS which was sent to the printer; since presumably Ricardo had made (as Mill had instructed him to do) a list of his chapters, and in such a list duplication could scarcely have been overlooked. It can be conjectured, therefore, that in the MS the matter of what are now Chapter IV, On Natural and Market Price, and Chapter V, On Wages, formed a single Chapter IV (presumably entitled ‘On Wages’) and that they were then subdivided during the revision of the proofs; the title of Chapter IV being altered and a new chapter-division (Chapter V, On Wages) introduced. The close link between these two chapters (which in the first draft sent to Mill had no doubt been among the topics ‘mixed together’) is shown by the continuity of the argument which in the chapter On Wages opens (and continues for several pages) in terms of the natural and market price of labour. Moreover, the statement at the end of Chapter III (below, p. 87) that he would continue the supposition of the invariable value of gold ‘in the following chapter’, must have been written when the two following chapters were undivided, since the ‘supposition’ is only relevant to the subject matter of what was to become Chapter V, On Wages. Further, it is a typographical peculiarity of the original edition 1 that the text of the last page of the former of these two chapters and that of the first page of the latter (namely pp. 89 and 90 of ed. 1), if put together, form exactly a normal full page (see facsimile opposite). If we assume that they were so joined together in the first proof, the printer could make the subdivision without disturbing the setting of the subsequent pages1 —at the expense only of making the opening page of the chapter On Wages two or three lines longer (as turns out to be the case) than the opening page of a chapter would normally be. As Ricardo was receiving a sheet of proofs a day,2 he could not immediately adjust the numbering of the subsequent chapters; and, as he was presumably returning them at once, he would never have the two chapters numbered V simultaneously before him. Thus the duplication would only be detected when the table of contents came to be compiled, after the body of the book had been printed off.
The explanation in the second instance is based on stronger evidence; and it is, indeed, by analogy with this case that our conjecture about the first derives support for its own rather slender foundation. This second case concerns the chapters ‘Taxes on Raw Produce’ and ‘Taxes on Rent’ which are respectively numbered VIII and VIII*, the asterisk appearing both in the chapter-heading and in the table of contents. Our suggestion is that these two at one time formed a single chapter (numbered VIII and entitled ‘Taxes on Raw Produce’) and that they were separated, not in the revision of the proofs, but at a much later stage—after the Index had been compiled and indeed after the book had been printed off: so that the pages affected had to be reprinted, and substituted by the binder in every one of the 750 copies of the edition.1
The existence of these ‘cancels’, as they are called, becomes apparent on examination of copies bound in paper boards as they were originally published. Three leaves are affected (the 6th, 7th and 8th of the sheet ‘signed’, or lettered, P); that is to say, six pages, including the last two pages of ‘Taxes on Raw Produce’ and the four pages of ‘Taxes on Rent’ (pp. 219–224 of edition 1, corresponding to pp. 171–175 below). These three leaves are visibly pasted in, to replace an equal number cut off, the flaps of which jut out between the pages—in some copies so much as half an inch. That they were printed separately from the sheet is conclusively proved by the fact that the first two of them are ‘conjugate’, that is to say joined together at the back, thus forming a single piece of paper even after the book has been cut—which otherwise would be impossible for the sixth and seventh leaves of an octavo sheet.
The making of a new Chapter VIII* out of the last four pages of the pre-existing Chapter VIII involved moving forward the text of these four pages to make room for the opening of the new chapter which must be on a fresh page. The repercussion of this displacement would be limited if the last page of the chapter had been partly empty and therefore capable of absorbing it. This appears to have been the case. (See facsimile opposite. As much matter as was removed from p. 220 and p. 221 has been shifted on to p. 224, filling it up completely; even that was insufficient, with the result that p. 221 is much longer than a normal opening page.)
Thus our hypothesis requires that the discussion of taxes on rent, which now begins on p. 221 (below, p. 173), should originally have begun in the space now blank on p. 220 (below, p. 172). It is in fact verified by an entry in the Index, under Rent, ‘Tax on rent falls wholly on the landlord’ which refers to pp. 220–224 (corresponding to pp. 172–175 below). This, incidentally, shows that the Index had been compiled before Chapter VIII was subdivided.
In the same way we obtain confirmation of the two chapters having been originally one from Index entries which lump them together. (Under Taxes, ‘Objections against the taxation of the produce of land, considered and refuted, 201–224’—corresponding to pp. 160–175 below. Similarly under Produce.)
While therefore it appears that the first of the two instances of double-numbering was due to an oversight, the second turns out to have been deliberate; and we may suppose that it was the discovery of the first case, by then beyond mending, which suggested the second to Ricardo and made it acceptable to the printer.1
The correspondence with Mill and the make-up of the book enable us to follow the process of dividing the work into chapters up to the last moment before publication. This process continued even later, in the form of the subdivision of Chapter I into Sections, which was only done in edition 2, and carried further in edition 3, as is described below, p. lii-liii.
By far the most perplexing as well as most extensive changes in successive editions of the Principles occur in the first chapter. A necessary preliminary to a study of these changes is a survey of the formation of the new theory of value out of the fragmentary elements of such a theory which are to be found in the Essay on the Influence of a low Price of Corn on the Profits of Stock.2
At first, both in the Essay and in Ricardo’s letters of 1814 and early 1815, a basic principle had been that ‘it is the profits of the farmer that regulate the profits of all other trades’. Malthus opposed him in this view, asserting that ‘the profits of the farmer no more regulate the profits of other trades, than the profits of other trades regulate the profits of the farmer’.1 After the Essay this principle disappears from view, and is not to be found in the Principles.
The rational foundation of the principle of the determining role of the profits of agriculture, which is never explicitly stated by Ricardo, is that in agriculture the same commodity, namely corn, forms both the capital (conceived as composed of the subsistence necessary for workers) and the product; so that the determination of profit by the difference between total product and capital advanced, and also the determination of the ratio of this profit to the capital, is done directly between quantities of corn without any question of valuation. It is obvious that only one trade can be in the special position of not employing the products of other trades while all the others must employ its product as capital. It follows that if there is to be a uniform rate of profit in all trades it is the exchangeable values of the products of other trades relatively to their own capitals (i.e. relatively to corn) that must be adjusted so as to yield the same rate of profit as has been established in the growing of corn; since in the latter no value changes can alter the ratio of product to capital, both consisting of the same commodity.
Although this argument is never stated by Ricardo in any of his extant letters and papers, he must have formulated it either in his lost ‘papers on the profits of Capital’ of March 18142 or in conversation, since Malthus opposes him in the following terms which are no doubt an echo of Ricardo’s own formulation: ‘In no case of production, is the produce exactly of the same nature as the capital advanced. Consequently we can never properly refer to a material rate of produce...It is not the particular profits or rate of produce upon the land which determines the general profits of stock and the interest of money.’1 The nearest that Ricardo comes to an explicit statement on these lines is in a striking passage in a letter of June 1814: ‘The rate of profits and of interest must depend on the proportion of production to the consumption necessary to such production.’2 The numerical examples in the Essay reflect this approach; and particularly in the well-known Table3 which shows the effects of an increase of capital, both capital and the ‘neat produce’ are expressed in corn, and thus the profit per cent is calculated without need to mention price.4
The advantage of Ricardo’s method of approach is that, at the cost of considerable simplification, it makes possible an understanding of how the rate of profit is determined without the need of a method for reducing to a common standard a heterogeneous collection of commodities.
In the Principles, however, with the adoption of a general theory of value, it became possible for Ricardo to demonstrate the determination of the rate of profit in society as a whole instead of through the microcosm of one special branch of production. At the same time he was enabled to abandon the simplification that wages consist only of corn, which had been under frequent attack from Malthus, and to treat wages as composed of a variety of products (including manufactures), although food was still predominant among them. It was now labour, instead of corn, that appeared on both sides of the account—in modern terms, both as input and output: as a result, the rate of profits was no longer determined by the ratio of the corn produced to the corn used up in production, but, instead, by the ratio of the total labour of the country to the labour required to produce the necessaries for that labour.5 (But while the theory that the profits of the farmer determine all other profits disappears in the Principles, the more general proposition that the productivity of labour on land which pays no rent is fundamental in determining general profits continues to occupy a central position).
Many years later, an echo of the old corn-ratio theory (which rendered distribution independent of value) can perhaps be recognised when Ricardo in a moment of discouragement with the difficulties of value writes to McCulloch: ‘After all, the great questions of Rent, Wages, and Profits must be explained by the proportions in which the whole produce is divided between landlords, capitalists, and labourers, and which are not essentially connected with the doctrine of value.’1
Parallel with this ran another theme in the development of Ricardo’s thought. At first he had subscribed to the generally accepted view that a rise in corn prices, through its effect upon wages, would be followed by a rise of all other prices.2 He had not regarded this view as inconsistent with his theory of profit so long as the latter had been expressed in its primitive ‘agricultural’ form. The conflict between the two however was bound to become apparent in the degree to which he groped towards a more general form of his theory; since the supposed general rise of prices obscured the simple relation of the rise of wages to the fall of profits. Already in the Essay on Profits, although his general presentation is still in the ‘agricultural’ form, he repudiates the accepted view in a footnote: ‘It has been thought that the price of corn regulates the prices of all other things. This appears to me to be a mistake.’3 Elsewhere in the Essay, in connection with this question, there are passages which foreshadow his full theory of value and already link it with the theory of profits: ‘The exchangeable value of all commodities rises as the difficulties of their production increase. If then new difficulties occur in the production of corn, from more labour being necessary, whilst no more labour is required to produce gold, silver, cloth, linen &c. the exchangeable value of corn will necessarily rise, as compared with those things.’1 Further on in the Essay he states: ‘A fall in the price of corn, in consequence of improvements in agriculture or of importation, will lower the exchangeable value of corn only,—the price of no other commodity will be affected. If, then, the price of labour falls, which it must do when the price of corn is lowered, the real profits of all descriptions must rise’.2
All these elements of the Essay are taken over into the chapter On Value in the Principles with the addition of several new ones, some of which have come to be regarded as the most characteristic of Ricardo’s theory, and are there built into a systematic theory of Value, on which are now based the theories of Rent, Wages and Profit.
The turning point in this transition from the Essay to the Principles was reached when, at the end of 1815, having set to work on the Principles, he wrote to Mill: ‘I know I shall be soon stopped by the word price’ (above, p. xiv). This is the first time that he faces the necessity for a general solution of the problem, instead of being content with dealing with the difficulties of price piece-meal as they arise in particular problems. At once a proper understanding of the matter appears to him as involving: (a) the distinction between causes which affect the value of money and causes which affect the value of commodities; (b) the supposition of the invariability of the precious metals as a standard of value; (c) the opposition to the view that the price of corn regulates the prices of all other commodities. These three things, which are so closely connected in his mind as to be almost identified, are what he calls ‘the sheet anchor on which all my propositions are built.’3
The distinction between the two types of influences upon value (on the side of money and on the side of commodities) is made possible by Ricardo’s treatment of money as a commodity like any other. Thus a change in wages could not alter the prices of commodities, since (if the gold mine from which money was obtained were in the same country) a rise of wages would affect the owner of the gold mine as much as the other industries.1 Hence it was the relative conditions of production of gold and of other commodities that determined prices, and not the remuneration of labour.
The attempt to weave into his general theory the proposition which he had established that a rise of wages does not raise prices, led immediately to his discovery of ‘the curious effect which the rise of wages produces on the prices of those commodities which are chiefly obtained by the aid of machinery and fixed capital.’2 It yielded the triumphant conclusion that, not only was it false that a rise of wages would raise the price of every commodity (as ‘Adam Smith, and all the writers who have followed him’3 had maintained that it would do), but on the contrary, it caused the prices of many commodities to fall: a result of which he stressed the ‘importance to the science of political economy’, although it accorded so little ‘with some of its received doctrines’.4
The importance which Ricardo came to attach to the principle that the value of a thing was regulated by the quantity of labour required for its production, and not by the remuneration of that labour, reflected his recognition that what his new theory was opposed to was not merely the popular view of the effect of wages on prices but another and more general theory of Adam Smith (of which that effect came to appear as a particular case)—what Ricardo referred to in writing to Mill as Adam Smith’s ‘original error respecting value’.5 This latter theory, in brief, was that ‘as soon as stock has accumulated in the hands of particular persons’ and ‘as soon as the land of any country has all become private property’, the price of commodities is arrived at by a process of adding up the wages, profit and rent: ‘in every improved society, all the three enter more or less, as component parts, into the price of the far greater part of commodities.’1 In other words, ‘wages, profit, and rent, are the three original sources...of all exchangeable value.’2 Adam Smith speaks also of the natural price varying ‘with the natural rate of each of its component parts, of wages, profit, and rent’.3
In the chapter On Value, Ricardo criticises Adam Smith for limiting the rule that commodities exchange according to the amount of labour required for their production to ‘that early and rude state of society, which precedes both the accumulation of stock and the appropriation of land’; ‘as if when profits and rent were to be paid, they would have some influence on the relative value of commodities, independent of the mere quantity of labour that was necessary to their production.’ But, Ricardo adds, Adam Smith ‘has no where analysed the effects of the accumulation of capital, and the appropriation of land, on relative value.’4 (The effect of ‘the appropriation of land’ is left by Ricardo for later consideration in the chapter On Rent, and in the chapter On Value he deals only with the accumulation of capital.) This passage in which he criticises Adam Smith has puzzled readers, since it appears to be ‘flatly contradicted’ (as Cannan put it)5 by the following sections of the chapter.
It is not until 1818 in a letter to Mill, now first available, that Ricardo states precisely the nature of his quarrel with Adam Smith’s theory and thereby clarifies this passage.
This he does by contrasting his own reading of the matter with that of Torrens. ‘He [Torrens] makes it appear that Smith says that after capital accumulates and industrious people are set to work the quantity of labour employed is not the only circumstance that determines the value of commodities, and that I oppose this opinion. Now I want to shew that I do not oppose this opinion in the way that he represents me to do so, but Adam Smith thought, that as in the early stages of society, all the produce of labour belonged to the labourer, and as after stock was accumulated, a part went to profits, that accumulation, necessarily, without any regard to the different degrees of durability of capital, or any other circumstance whatever, raised the prices or exchangeable value of commodities, and consequently that their value was no longer regulated by the quantity of labour necessary to their production. In opposition to him, I maintain that it is not because of this division into profits and wages,—it is not because capital accumulates, that exchangeable value varies, but it is in all stages of society, owing only to two causes: one the more or less quantity of labour required, the other the greater or less durability of capital:—that the former is never superseded by the latter, but is only modified by it.’1 The relevance of this statement to certain changes in later editions will become apparent in the next section.
It will be convenient to deal with the main changes in the chapter On Value in editions 2 and 3 before we deal with these editions as a whole.
It has come to be a widely accepted opinion about Ricardo that in subsequent editions he steadily retreated under pressure of his critics from the theory of value presented in edition 1. This was the view disseminated by Professor Hollander in his well-known article on ‘The Development of Ricardo’s Theory of Value’.2 In speaking of edition 2 Hollander says that the textual changes in it ‘although not vital’ could be regarded ‘as highly significant’ and that it ‘showed an appreciable increase of reserve in the advocacy of “embodied labour” as a universal measure of value’.3 With reference to edition 3 he says that the chapter On Value ‘is in content and tendency very different’4 from that in the first edition; and elsewhere he speaks of ‘greater emphasis upon the modifications of the principles which determine relative value’ due to the employment of capital.5 Professor Cannan went further and spoke of Ricardo’s ‘unwilling admission of the influence of interest on capital as a modification of the pure labour-cost theory of value’. Concerning the effect of capital on value, says Cannan, Ricardo ‘was weak from the beginning, and he weakened more and more as time went on and criticism multiplied’.1 Thus the view of a retreat in Ricardo’s position over successive editions has become established. But an examination of the changes in the text in the light of the new evidence lends no support to this view: the theory of edition 3 appears to be the same, in essence and in emphasis, as that of edition 1.
The alterations were certainly extensive; little more than half of the final version (edition 3) of the chapter On Value being found in the same form in edition 1. Although the changes made in edition 2 were small and there was little rearrangement of the matter, the subdivision into sections was first introduced in that edition; this only emphasized the repetition and lack of order in the treatment and rendered necessary the complete rearrangement and rewriting of edition 3. Thus the statement of the exceptions to the law of value due to different proportions of capital (or, as Ricardo put it, to the rise or fall of wages), which was repeated in edition 1 in different places2 (and is still scattered under several sections in edition 2) is mostly collected in edition 3 under Sections iv and v.
All the evidence in favour of a ‘weakening’ of Ricardo is based on the current misunderstanding of certain changes in the text which the letter to Mill quoted at the end of the last section enables us to rectify. The evidence in question rests mainly upon two changes. First, the dropping in edition 3 of the passage in which Adam Smith was criticised for having limited the application of the principle of value to the ‘early and rude state of society’,3 a change which looks at first sight significant; we now know however that this was withdrawn because it had lent itself to misinterpretation, and the letter quoted above shows that Ricardo was not shaken in his position by Torrens’s criticism. The second change is the replacement in edition 3 of the statement that exchangeable value ‘depends solely’ upon the quantity of labour realised in a commodity with ‘depends almost exclusively’.1 But here again the letter to Mill now makes it clear that the background against which the ‘solely’ of edition 1 is to be understood is that no prices can rise as a result of a rise of wages—they can only be raised by an increase in the difficulty of production. On the other hand, in ed. 3 the ‘almost exclusively’ reflects the change in the choice of standard from ed. 1 to ed. 3 (to be described below, pp. xlii-xlv), the new standard permitting a rise of price, as a result of a rise of wages, in the case of commodities produced without fixed capital.
This phrase thus takes its place as one of a series of modifications which were designed to minimise the extent of such price-changes in either direction as, in terms of the newly adopted standard, do occur when wages rise. The other passages introduced in edition 3 to the same effect were as follows: ‘it would be...incorrect to attach much importance to it’, below, p. 36; ‘another, though a minor variation’, p. 42; ‘comparatively slight in its effects’, p. 36 and again p. 45.2 The implication of these changes is clear enough and Malthus at any rate did not regard edition 3 as showing any weakening: ‘The effects of slow or quick returns, and of the different proportions of fixed and circulating capitals, are distinctly allowed by Mr. Ricardo; but in his last edition, (the third, p. ) he has much underrated their amount.’3
At one moment between edition 2 and edition 3 Ricardo did show signs of weakening. In a much-quoted passage he wrote to McCulloch on 13 June 1820: ‘I sometimes think that if I were to write the chapter on value again which is in my book, I should acknowledge that the relative value of commodities was regulated by two causes instead of by one, namely, by the relative quantity of labour necessary to produce the commodities in question, and by the rate of profit for the time that the capital remained dormant, and until the commodities were brought to market. Perhaps I should find the difficulties nearly as great in this view of the subject as in that which I have adopted.’1 Within six months he did rewrite the chapter, and evidently found ‘the difficulties’ of this view even greater than in the case of his original view, since he now in ed. 3 confirmed it.2
Letters written in these intervening months provide evidence enough that this weakening was no more than a passing mood. Already on 9 Oct. 1820 he is writing to Malthus: ‘You say that my proposition “that with few exceptions the quantity of labour employed on commodities determines the rate at which they will exchange for each other, is not well founded.” I acknowledge that it is not rigidly true, but I say that it is the nearest approximation to truth, as a rule for measuring relative value, of any I have ever heard’; and adds: ‘My first chapter will not be materially altered—in principle I think it will not be altered at all.’3 And on 25 Jan. 1821, while still wrestling with the problem of a standard of absolute value, he writes to McCulloch: ‘I am fully persuaded that in fixing on the quantity of labour realised in commodities as the rule which governs their relative value we are in the right course.’4
Although no essential change was made in successive editions about the rule which determines value, two considerable alterations were made in connection with the choice of an invariable measure of value. The search for what has been called ‘the chimera of an invariable standard of value’5 preoccupied Ricardo to the end of his life. However, the problem which mainly interested him was not that of finding an actual commodity which would accurately measure the value of corn or silver at different times and places; but rather that of finding the conditions which a commodity would have to satisfy in order to be invariable in value—and this came close to identifying the problem of a measure with that of the law of value: ‘Is it not clear then 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?’1
The first of the alterations of which we have spoken was occasioned by a growing sense of the difficulty of even conceiving of such an invariable commodity. In ed. 1 and ed. 2 the essential quality which a commodity must have to be invariable is that it should require ‘at all times, and under all circumstances, precisely the same quantity of labour’ to produce it.2 He admitted that ‘of such a commodity we have no knowledge’. But this he regarded as only a practical difficulty; and he expressed no doubts as to what the ‘essential qualities’ of such a standard were.3 In ed. 3, however, Ricardo enlarged on the difficulty and stated that, even if a commodity could be found which satisfied that requirement, ‘still it would not be a perfect standard or invariable measure of value’, since ‘it would be subject to relative variations from a rise or fall of wages’ on account of different proportions of fixed capital or different durabilities of fixed capital or different times necessary to bring it to market.4 Thus the same exceptions which he had discovered in the fundamental rule determining value cropped up again in attempting to define the qualities of an invariable standard.
The second change concerned the conditions of production of the commodity to be adopted as standard. These were defined as follows in ed. 1: ‘in this whole argument I am supposing money to be of an invariable value; in other words, to be always the produce of the same quantity of unassisted labour’.1 In that edition Ricardo only acknowledged two forms of variation of capital: different proportions of fixed and circulating capital and different durabilities of fixed capital. He had not yet noticed the ‘different times it takes to market’ (or durability of circulating capital), to which his attention was to be drawn by Torrens;2 with the result that in edition 2 this was introduced as a third form of variation of capital.3 In ed. 1 therefore ‘unassisted’ meant unassisted by fixed capital, with the tacit assumption that the period which all things took to produce and bring to market (i.e. circulating capital to circulate) was a year. As James Mill was to put it in his Elements, ‘A year is assumed in political economy as the period which includes a revolving circle of production and consumption.’4
The qualification ‘unassisted’ is made explicitly by Ricardo only in the carefully worded passage which we have quoted, and in other places5 he mentions simply ‘the same quantity of labour’. But to the deductions based upon it the qualification is essential; and in ed. 1 it is consistently implied in Ricardo’s argument.6 It is, indeed, from this definition of invariable money that there follows the striking result that ‘commodities may be lowered in value in consequence of a real rise of wages, but they never can be raised from that cause’7 (the reason being that in the production of some commodities fixed capital enters while it does not enter into the production of gold, or money). Here ‘value’ clearly refers to ‘absolute’ value,i.e. value measured in the invariable standard. When Ricardo in ed. 1 speaks of ‘relative value’,1 he says that, with a rise of wages, some goods will rise compared with others.
In ed. 2 the substance of the argument is unchanged; but a number of alterations in wording, which emphasize this paradox of commodities falling in value when wages rise, tend to obscure the distinction just mentioned between the effect of changes in wages upon ‘absolute’ and upon ‘relative’ value. Thus, passages which stated that, with a rise of wages, some commodities rise in relative value compared with others, in ed. 2 are turned round so as to say that some commodities fall in terms of others.2 And in the statement of ed. 1 that ‘no commodities whatever are raised in absolute price, merely because wages rise’, the words ‘absolute price’ are confusingly replaced by ‘exchangeable value’.3
Malthus, in his Principles of Political Economy, draws attention to the case of commodities where the period of turnover of circulating capital may be less than one year.4 In such a case (covering, as he suggests, ‘a large class of commodities’) prices will rise ‘consequently upon a rise in the price of labour and fall of profits’. Ricardo in his Note5 upon this passage admits that he has ‘inadvertently omitted to consider’ this case, and that ‘Mr. Malthus is quite right in asserting that many commodities in which labour chiefly enters, and which can be quickly brought to market will rise, with a rise in the value of labour’. The ‘correct opinion’ as he now states it is that, in consequence of ‘a rise in the money price of wages, and a fall of profits, so far from its being true that all other commodities would also rise in price, there will be a large class which will absolutely fall —some which will not vary at all, and another large class which will rise.’1 This concession in the Notes on Malthus marks the transition between ed. 2 and ed. 3.
As an extreme instance of the case to which he had drawn attention Malthus introduced2 the striking example of silver picked up on the sea-shore with the labour of one day and therefore without either fixed or circulating capital—a standard in terms of which ‘no rise in the price of labour could take place’.3
At the time when his ed. 3 was already in the press Ricardo wrote to McCulloch: ‘when I want to fix a standard of absolute value I am undetermined whether to chuse labour for a year, a month, a week, or a day’.4 But he had already suggested to McCulloch in a previous letter (in June 1820) that ‘perhaps the best adapted to the general mass of commodities’ was ‘the medium’ between the ‘two extremes’: ‘one, where the commodity is produced without delay, and by labour only, without the intervention of capital; the other where it is the result of a great quantity of fixed capital, contains very little labour, and is not produced without considerable delay.’ ‘Those commodities on one side of this medium, would rise in comparative value with it, with a rise in the price of labour, and a fall in the rate of profits; and those on the other side might fall from the same cause.’5
In edition 3, therefore, the standard adopted was money ‘produced with such proportions of the two kinds of capital as approach nearest to the average quantity employed in the production of most commodities’;6 and the relevant passages were accordingly altered to the effect that, with a rise of wages, some commodities would fall and others rise in terms of this standard.7 (If measured in such a standard, the average price of all commodities, and their aggregate value, would remain unaffected by a rise or fall of wages.)
Already in one of the letters to McCulloch from which we have just quoted Ricardo had suggested that ‘all the exceptions to the general rule’ could be reduced to ‘one of time’:1i.e. all those deriving from different proportions of fixed and circulating capitals, different durabilities of fixed capital, or differences in the ‘time it takes to market’ (or durability of circulating capital) could be reduced to terms of labour employed for a longer or a shorter time. This conception was the one to which he finally adhered. In the newlydiscovered paper on ‘Absolute Value and Exchangeable Value’,2 written at the end of his life, the standard adopted in ed. 3 was in effect equated to that of ed. 1 by the statement that ‘a commodity produced by labour employed for a year is a mean between the extremes of commodities produced on one side by labour and advances for much more than a year, and on the other by labour employed for a day only without any advances, and the mean will in most cases give a much less deviation from truth than if either of the extremes were used as a measure.’3
Having started, therefore, with ‘labour employed for a year’, regarded as the ‘extreme’ of ‘unassisted labour’, Ricardo became convinced, firstly that this was not really an ‘extreme’ since many commodities were produced by labour employed for less than one year, and secondly that, if he were to take ‘labour employed for a day only without any advances’, this would be the equivalent of a ‘labour commanded’ standard and wages could never rise in terms of this standard. He accordingly in edition 3 takes ‘a just mean’ between the extremes, ‘produced with such proportions of the two kinds of capital as approach nearest to the average’.4 Having done so, he comes finally to the view that this mean can be reduced to ‘a commodity produced by labour employed for a year’5 —the very standard which he had used in edition 1, but which he had at that time treated as being an ‘extreme’.
The idea of an ‘invariable measure’ has for Ricardo its necessary complement in that of ‘absolute value’. This concept appears in the Principles at first (in ed. 1) as ‘absolute value’1 and later (in ed. 3) as ‘real value’,2 it comes out from time to time in his letters,3 and takes more definite shape in his last paper on ‘Absolute Value and Exchangeable Value’. In one of his drafts for that paper he writes: ‘No one can doubt that it would be a great desideratum in political Economy to have such a measure of absolute value in order to enable us to know[,] when commodities altered in exchangeable value[,] in which the alteration in value had taken place’.4 In another draft he explains what he means by a test of whether a commodity has altered in value: ‘I may be asked what I mean by the word value, and by what criterion I would judge whether a commodity had or had not changed its value. I answer, I know no other criterion of a thing being dear or cheap but by the sacrifices of labour made to obtain it.’5 And elsewhere he writes: ‘To me it appears a contradiction to say a thing has increased in natural6 value while it continues to be produced under precisely the same circumstances as before.’7
Ricardo starts (in ed. 1 of the Principles) by applying the concept to the problem of two commodities which have changed in relative value as a result of a change in the difficulty of production: absolute value is then the criterion for deciding in which of the two the real change has occurred. He ends (in his last paper on value) by bringing this criterion to bear upon another problem, namely the distinction between two causes of changes in exchangeable value: for, ‘difficulty or facility of production is not absolutely the only cause of variation in value[,] there is one other, the rise or fall of wages’, since commodities cannot ‘be produced and brought to market in precisely the same time’.8 Absolute value, however, reflects only the first type of change and is not affected by the latter. As Ricardo says with reference to a commodity which changes in price owing to a rise of wages: ‘If the measure was perfect it ought not to vary at all’.1 After one of the numerical examples with which in a letter of 1823 he illustrates this deviation, he comments as follows: ‘The two commodities change in relative value....Can it be said that theproportions of capital we employ are in any way altered? or the proportion of labour? certainly not, nothing has altered but the rate of distribution between employer and employed...—this and this only is the reason why they alter in relative value’; and he concludes: ‘The fact is there is not any measure of absolute value which can in any degree be deemed an accurate one.’2 Accordingly he falls back on his admittedly imperfect standard as giving the least ‘deviation from truth’.3
In this attempt to extend the application of absolute value to the second problem (that of distinguishing the two sorts of changes in exchangeable values) Ricardo was confronted with this dilemma: whereas the former application presupposes an exact proportionality between relative and absolute value, the latter implies a variable deviation of exchangeable from absolute value for each individual commodity. This contradiction Ricardo never completely succeeded in resolving, as is apparent from his last paper.
There is another respect in which his last paper on value reverts to a position similar to that of edition 1. The effects on value of different proportions or durabilities of capital can be looked upon from two distinct aspects. First, that of occasioning a difference in the relative values of two commodities which are produced by equal quantities of labour. Second, that of the effect which a rise of wages has in producing a change in their relative value. In edition 1 the second aspect is the one exclusively considered: whenever different proportions or durabilities of capital are mentioned in connection with value, Ricardo always speaks in terms of the effect of a rise of wages. The first aspect creeps into the later editions: once into edition 2 and a few times into edition 3, usually as incidental to discussion of variations in value, and probably as a result of argument with his opponents, particularly Torrens and Malthus, who looked at the problem from this angle.1 But while in edition 3 Ricardo sometimes refers to different proportions or durabilities of capital as causing differences in relative values, the effect of a rise in wages remains in the forefront, and it is upon this aspect that attention is focused in the paper on ‘Absolute Value and Exchangeable Value’.
This preoccupation with the effect of a change in wages arose from his approach to the problem of value which, as we have seen, was dominated by his theory of profits. The ‘principal problem in Political Economy’ was in his view the division of the national product between classes2 and in the course of that investigation he was troubled by the fact that the size of this product appears to change when the division changes. Even though nothing has occurred to change the magnitude of the aggregate, there may be apparent changes due solely to change in measurement, owing to the fact that measurement is in terms of value and relative values have been altered as a result of a change in the division between wages and profits. This is particularly evident in the extreme case where the aggregate is composed of the same commodities in the same quantities, and yet its magnitude will appear to have changed as measured in value.
Thus the problem of value which interested Ricardo was how to find a measure of value which would be invariant to changes in the division of the product; for, if a rise or fall of wages by itself brought about a change in the magnitude of the social product, it would be hard to determine accurately the effect on profits. (This was, of course, the same problem as has been mentioned earlier3 in connection with Ricardo’s corn-ratio theory of profits.) On the other hand, Ricardo was not interested for its own sake in the problem of why two commodities produced by the same quantities of labour are not of the same exchangeable value. He was concerned with it only in so far as thereby relative values are affected by changes in wages. The two points of view of difference and of change are closely linked together; yet the search for an invariable measure of value, which is so much at the centre of Ricardo’s system, arises exclusively from the second and would have no counterpart in an investigation of the first.
This function of the theory of value of making it possible, in the face of changes in distribution, to measure changes in the magnitude of aggregates of commodities of different kinds or, what is even more important, to ascertain its constancy, appears once more in connection with the measurement of the quantity of capital. With reference to the theory of Torrens (‘that commodities are valuable according to the value of the capital employed on their production, and the time for which it is so employed’) Ricardo says in the letter to McCulloch of 21 Aug. 1823: ‘I would ask what means you have of ascertaining the equal value of capitals?... These capitals are not the same in kind [if they were, he points out in an earlier draft, ‘their proportional quantities would indicate their proportional values’1 ]... and if they themselves are produced in unequal times they are subject to the same fluctuations as other commodities. Till you have fixed the criterion by which we are to ascertain value, you can say nothing of equal capitals’; for, as he says in another draft of this letter, ‘the means of ascertaining their equality or variation of value is the very thing in dispute.’2
Only 750 copies of edition 1 of the Principles had been printed,3 and within two months of publication Murray told Ricardo that a second edition would ‘most assuredly be required’.4 Ricardo, however, heard no more of this until after the appearance of McCulloch’s review in the number of the Edinburgh Review for June 1818 (actually published in August) by which the sale was ‘much accelerated’.1 On 8 November 1818 Ricardo wrote to Mill: ‘I hear from various quarters that my book is selling very fast, and that a new edition will soon be required’; adding, ‘I think in the last conversation we had together we agreed that there would not be very great advantage in making any new arrangement of the contents, as it appears to have made the impression I could wish on those who have well considered it’.2 On 17 November 1818 he received a request from Murray to prepare a second edition; and within a week Ricardo had the book ready for the press.3 In sending the revised copy to Murray, he mentioned that it contained ‘a few very trifling alterations’ and asked that the proposed division into sections of the first chapter should be sent by messenger to Mill for his approval.4 However, edition 2 was not published until 27 February 1819.5
In the intervening period he received the French translation of his own Principles, with Say’s notes;6 and in reply to one of these notes he added a passage referring to the question whether the theory of rent depended upon the existence of land which paid no rent.7 This point had also been the subject of discussion during a visit of Malthus to Gatcomb in December 1818.8 At one time he thought of having Say’s notes translated and published as an appendix of his own ed. 2; but he referred the matter to Murray, who evidently decided against it.9
On the whole, the alterations in edition 2 were unimportant, and Ricardo could say that it contained ‘nothing new’.10 A few changes made to meet criticisms of particular points are of some interest and can be identified as follows. Some passages on taxation had been criticised by McCulloch. When he was revising the book for edition 2 Ricardo wrote to McCulloch that he proposed to alter a passage which might be considered to ‘hold out an apology to ministers for taxation’, and asked for suggestions ‘on all those passages which you would like to see altered’.1 Two footnotes were added to meet Torrens’s complaint that he had not been mentioned.2 The first of these (p. 96–7) notices a passage from Torrens on the natural price of labour (which is remarkable for its emphasis on the influence of ‘habits of living’), for which Torrens had claimed originality.3 The adoption of Torrens’s suggestion about the ‘unequal durability’ of circulating capitals has been mentioned above. A passage on the causes of the miserable state of the Irish peasantry criticised by George Ensor was omitted;4 and a note was added to Chapter I in defence of the illustration of a machine producing without human labour which had been ridiculed in the British Review.5 Two changes, one about the effect of improvements in agriculture on rent and the other about corn importation and profits,6 which appear to have arisen out of correspondence with Malthus, anticipated more extensive alterations in edition 3.
One group of apparently slight corrections may be more significant than at first appears. In ed. 1 Ricardo had frequently employed the curious phrase ‘price of wages’;7 in ed. 2 however the expression is removed in several cases,8 and its elimination is carried further in ed. 3.9 Although in places he clearly treats this phrase as interchangeable with ‘price of labour’ or simply ‘wages’,1 it must originally have been related to the expression ‘real value of wages’, which he uses in explaining the peculiar sense in which he is to be understood when he speaks of the rise or fall of wages: namely as referring to the proportion of the total product going to labour, and not to the absolute quantity of commodities received by the labourers.2 However, after thus defining the ‘real value of wages’, he did not use again that expression in the Principles, except when in ed. 3 he had to defend himself against Malthus’s complaint that he had adopted ‘new and unusual language’ in connection with wages:3 —a complaint renewed in later times by Marshall, who deplored Ricardo’s failure to invent some new term for the purpose.4 Perhaps the early use of ‘price of wages’ was a sign that Ricardo at first felt the need for a special term, whereas later he seems to have come to regard the unqualified term ‘wages’ as adequate, ‘at least among Political Economists’,5 to describe proportional wages.
The only prominent change was the subdivision of the chapter On Value into sections each carrying its own heading. It was on these that he had consulted Mill. The division introduced in edition 2 seems to have been made at first into four sections, and then to have been changed to five before the titles were sent to Mill,6 in which form it finally appeared. This required the splitting of a section into two, and it was probably Section i that was divided, the additional heading being: ‘Sect. ii. The accumulation of capital makes no difference in the principle stated in the last section’.7 That the heading of Section i was written when that section included the whole of what was published as Section ii, is shown by the fact that its statement that value does not depend ‘on the greater or less compensation which is paid for that labour’ can only refer to the text of the latter part of Section ii.1 It may be noticed that Section i, thus reduced, was further subdivided in edition 3, without the heading being changed; with the result that the heading of Section i still adequately covers the contents of the whole of the first three sections of the chapter in edition 3.
This subdivision required the rewriting of certain passages which now formed the beginning and the end of sections. But it is surprising how little rearrangement was made: only an obviously misplaced paragraph in the middle of the chapter2 and the three concluding paragraphs3 were transferred to more appropriate places.
Before Ricardo left London for the country in July 1820 Murray told him that ‘he should soon wish to publish a new edition’ of the Principles;4 and during the next six months (which, after a few weeks at Brighton, he spent at Gatcomb)5 he revised his book for edition 3. This was done in the intervals of what was to become his main preoccupation during this period: re-reading, and writing his Notes on, Malthus’s Principles of Political Economy. At first he had intended to include in edition 3 his defence against Malthus’s attacks. But he afterwards gave up this project; Mill (who in August and September was on a visit to Gatcomb) had ‘strongly dissuaded’ him from it, and advised him not to notice any attacks for fear of ‘giving too controversial a character’ to the book.6
On 4 September 1820 Ricardo writes to Malthus: ‘I have been looking over my first chapter, with a view to make a few alterations in it before the work goes to another edition. I find my task very difficult, but I hope I shall make my opinions more clear and intelligible.’1 A month later he could report substantial progress to Mill: ‘I have done what I at present think necessary to my first chapter, and have laid it by for fresh inspection after I have forgotten it a little.’2
Early in January 1821 Murray included Ricardo’s ‘Third edition, corrected’ in his advertised list of ‘works preparing for immediate publication’.3 In a letter of 14 January Ricardo wrote that he expected his third edition to be printed within a few days;4 and again on 25 January he wrote that the first chapter was ‘now printing’ and referred to one of the later chapters of the book as being ‘in the printers hands’.5
However, it was nearly four months from this time before the new edition was on sale; Murray’s advertisement of actual publication appearing for the first time in the Morning Chronicle of 18 May 1821, the price being stated as 12s. The reason for the delay is disclosed by a letter of Malthus to Prévost of 26 April 1821: ‘Mr. Murray my bookseller seems to be of opinion that the times are not favourable for book-selling and is now keeping back a new edition of Mr. Ricardo’s work which is finished, because the former edition has not gone off so soon as he had calculated upon.’6 This did not prevent Ricardo in the meantime from sending advance copies to his friends. On 25 April he wrote to McCulloch that he had asked Murray to send him a copy ‘last week’;7 and on 8 May in sending a copy to Say he wrote: ‘Owing to the delay of Bookseller, and Printer, the time has been protracted far beyond my expectation, but at length I am able to send you herewith one of the first published copies of this last edition.’8
The changes in this edition were considerably more extensive than those made in edition 2. Yet Ricardo seems to have regarded them, for the most part, as unimportant. We find him writing to Trower on 14 January 1821: ‘I have carefully looked over every part of it, and with my limited powers of composition I am convinced I can do very little to improve it’;1 and on 25 April to McCulloch: ‘You will not find much of novelty in the new edition’.2
The main changes in the first chapter have already been mentioned. As regards arrangement, the five sections of edition 2 were increased to seven by subdividing Section 1 and also adding a new section On an Invariable Measure of Value. The rearrangement of the text of this chapter, begun in edition 2, was continued more extensively; and although a few anomalies remained, the chapter gained greater unity. Passages previously misplaced were transferred to the appropriate sections, and repetitions were avoided either by omitting a passage or by incorporating different passages into one.
Many of the Notes on Malthus’s Principles are reflected in the alterations made in the new edition. With reference to his old difference with Malthus as to the effect of agricultural improvements upon rent, Ricardo adds a footnote3 in edition 3 allowing the ultimate benefit to landlords, without yielding his contention that the immediate effect of improvements was harmful to them. Malthus had asked in what sense Ricardo could agree with Sismondi and Buchanan in saying that the price of corn ‘is like that of a common monopoly, or advantageous only to the landlords, and proportionably injurious to the consumers’.4 Ricardo’s reply was that the landlord’s interest was ‘that the machine which he had for producing corn should be in demand—that in fact his rent depended on it’. Only after cheap corn had increased population would ‘the advantage of the improvement’ be ‘transferred to the landlord’.5 A similar idea is expressed in two new paragraphs added to Chapter XXIV, in which he states that, when the productivity of the soil is increased, ‘all the advantages would, in the first instance, be enjoyed by labourers, capitalists and consumers; but with the progress of population, they would be gradually transferred to the proprietors of the soil.’6
On the advantages of free importation of corn Ricardo was even more emphatic than he had been in previous editions. In the ‘Advertisement to the Third Edition’ (below, p. 8) he directs the attention of the reader to the changes which he has introduced into the last chapter, in order to throw into sharper relief the doctrine of the increased ability of a country to pay taxes as a result of a diminished cost of food.
Malthus in his Principles had also criticised Ricardo for having applied to rent his measure by ‘proportions or cost in labour’,1 and having suggested as a result that with the extension of cultivation the proportion of rent to the total produce of land would increase. Ricardo devoted one of his Notes2 to a restatement of his position, and explained in effect that rent would take up an increased proportion of the produce of the old lands, or, if additional capitals be employed on the same lands, an increased proportion ‘of each quantity before obtained’.3 In a deleted passage in the Notes on Malthus he explains his meaning concisely as follows: ‘Rent is not a proportion of the produce obtained—it is not governed like wages or profits by proportions—depending as it does on the difference between the quantity of produce obtained by two equal capitals. If therefore I have anywhere said that rent rises or falls in the proportion that the produce obtained is increased or diminished I have committed an error. I am not however conscious of having so done’.4 Nevertheless, in edition 3 he modified a number of passages which had laid him open to Malthus’s criticism. Typical of these is the change in the phrase of editions 1 and 2, ‘In speaking of the rent of the landlord, we have rather considered it as the proportion of the whole produce’, the concluding words of which are replaced in edition 3 by: ‘as the proportion of the produce obtained with a given capital on any given farm’.5
The changes in ed. 3 due to Say were occasioned partly by changes in the 4th edition (1819) of Say’s Traité and partly by Say’s Lettres a‘ M. Malthus (1820) on which Ricardo had written some notes at the same time as he was writing his Notes on Malthus.1 The main change is the rewriting of several paragraphs in the chapter on Value and Riches2 and the omission of some paragraphs in the same chapter which cite extensively from the earlier editions of Say’s Traité,3 in view of changes made by Say in his 4th edition.4 There were also a few minor additions in other chapters.5
The most revolutionary change in edition 3 is the new chapter On Machinery, in which Ricardo retracts his previous opinion that the introduction of machinery is beneficial to all the different classes of society. ‘My mistake’, he explains, ‘arose from the supposition, that whenever the net income of a society increased, its gross income would also increase; I now, however, see reason to be satisfied that the one fund, from which landlords and capitalists derive their revenue, may increase, while the other, that upon which the labouring class mainly depend, may diminish’.6 His conclusion must have shocked his friends even more than the change of principle itself: ‘That the opinion entertained by the labouring class, that the employment of machinery is frequently detrimental to their interests, is not founded on prejudice and error, but is conformable to the correct principles of political economy.’7
Previously Ricardo had held the view that, since machinery made it possible to produce commodities at a lower cost, it must lead to an increase in their quantity and accordingly be beneficial to all classes of society. He had not expressed this view in the earlier editions of the Principles, and the only place where he had stated in print an opinion as to the effect of machinery upon labour was an incidental reference in the Essay on Profits where he alluded to ‘the effects of improved machinery, which it is now no longer questioned, has a decided tendency to raise the real wages of labour.’8 But as he says at the beginning of the new chapter he had ‘in other ways’ given support to those doctrines. He probably had in mind a speech in Parliament in 1819 on Robert Owen’s plan in which he had declared that ‘it could not be denied, on the whole view of the subject, that machinery did not lessen the demand for labour’.1 Barton’s pamphlet of 1817, Observations on the Condition of the Labouring Classes, with its view as to the adverse effects of machinery on labour, does not seem to have influenced Ricardo at the time of its publication;2 although he quotes it with approval in the new chapter in edition 3. When McCulloch, in an article on ‘Taxation and the Corn Laws’ in the Edinburgh Review of January 1820, had approved the ideas of Barton (of whose pamphlet the article was ostensibly a review), Ricardo wrote to McCulloch contesting this opinion. McCulloch had stated that ‘the fixed capital invested in a machine, must always displace a considerably greater quantity of circulating capital,—for otherwise there could be no motive to its erection; and hence its first effect is to sink, rather than increase, the rate of wages.’3 In reply Ricardo had said: ‘the employment of machinery I think never diminishes the demand for labour—it is never a cause of a fall in the price of labour, but the effect of its rise.’4 McCulloch became a convert to this view, and in an article in the Edinburgh Review of March 1821 maintained that ‘no improvement of machinery can possibly diminish the demand for labour, or reduce the rate of wages.’5 It is scarcely surprising that he should have taken strong exception to Ricardo’s sudden change of front on the matter, and that on seeing the new edition he should have bitterly complained (in a letter now first published) of ‘the extreme erroneousness of the principles to which you have incautiously lent the sanction of your name’.6
The writing of the Notes on Malthus in the autumn of 1820, especially Note 149, marked a transition-stage in Ricardo’s thinking on the subject. Malthus in his chapter ‘Of the Wages of Labour’ had quoted Barton to the effect that ‘the demand for labour can only be in proportion to the increase of the circulating, not the fixed capital’; but, while admitting that ‘this is no doubt true in individual cases’, Malthus had asserted that ‘it is not necessary to make the distinction in reference to a whole nation’ and that ‘in general...the use of fixed capital is extremely favourable to the abundance of circulating capital’.1 Ricardo commented on this as follows: ‘The effective demand for labour must depend upon the increase of that part of capital, in which the wages of labour are paid...—to the capitalist it can be of no importance whether his capital consists of fixed or of circulating capital, but it is of the greatest importance to those who live by the wages of labour; they are greatly interested in increasing the gross revenue, as it is on the gross revenue that must depend the means of providing for the population. If capital is realized in machinery, there will be little demand for an increased quantity of labour’.2 Another Note (153) seems to approach even closer to the new doctrine: ‘It might be possible to do almost all the work performed by men with horses, would the substitution of horses in such case, even if attended with a greater produce, be advantageous to the working classes, would it not on the contrary very materially diminish the demand for labour?’3
The final step in his change of opinion came when (as he himself says in the new chapter) he ceased to hold that ‘whenever the net income of a society increased, its gross income would also increase’,4 and came to hold instead that machinery could be profitable to introduce and yet result in a smaller total product, and demand for labour.
There is no evidence as to the precise stage at which Ricardo adopted his final view that improved machinery might actually diminish the gross produce. Mallet, in an entry in his diary at the time of Ricardo’s death in September 1823, stated: ‘It accidentally happened at a dinner at his [Ricardo’s] house three years ago, at which Mr. Grenfell, Mr. Tooke, and other persons were present, that in consequence of an objection which then occurred to me as to the prevailing opinions on the subject of the unmixed benefit resulting from the substitution of machinery for human labour, Mr. Ricardo was afterwards led (although he then differed from me) to reconsider the subject and to write the additional chapter on machinery in his 3rd edition. This he told me himself in the kindest and most ingenuous manner.’1 He apparently had not yet changed his views by 29 Nov. 1820;2 and the first intimation we have is in a letter of Malthus to Sismondi of 12 March 1821, which mentions that Ricardo has altered his views on machinery.3 McCulloch evidently knew nothing until Ricardo’s letter to him of 25 April 1821 with its reference to ‘a change in my sentiments respecting the advantages of machinery’.4 Having made the change, however, Ricardo stoutly defended his new position against McCulloch’s objections. ‘These truths’, he wrote, ‘appear to me to be as demonstrable as any of the truths of geometry, and I am only astonished that I should so long have failed to see them.’5
The present edition of the Principles is based on a complete collation of the first, second and third editions. The text adopted is that of edition 3, published in 1821, the last to be revised by Ricardo. All the variants of editions 1 and 2 are given in the editor’s footnotes.
A special method, however, has had to be adopted in the case of Chapter I, On Value, in some parts of which the changes are so extensive and so complicated as to make it impossible to convey to the reader an adequate idea of them by means of footnotes alone. Accordingly, at the end of that chapter the text of edition 1 for the last two-thirds of the chapter is printed in smaller type as an Appendix (below, pp. 52–66). The footnotes to the corresponding text of edition 3 (pp. 26–51) indicate all the differences from editions 1 and 2; but while in the case of shorter passages these are quoted in full in the footnotes, for the longer ones reference is merely given to the text in the Appendix. On the other hand, the footnotes to the text of edition 1 in the Appendix give only the changes in edition 2.
In addition, to give a clearer picture of the rearrangement of the matter, a Table of Concordance, exhibiting the relative position of corresponding paragraphs in editions 1 and 3 for this part of the chapter, has been inserted at the end of this Introduction on a folding sheet.* The correspondence between the passages shown in this Table is sometimes no more than approximate, and for the precise relation between them the reader should refer to the footnotes. On the same folding sheet* a similar Table has been given for the location in edition 3 of such passages as were newly added in edition 2.
Thus by the combined use of the Tables of Concordance and of the footnotes the reader should be enabled either to read edition 3, tracing back the text to the earlier versions of editions 1 and 2, or alternatively to read edition 1, following out the modifications of the text in the subsequent editions.
A comparative Table of Section-Headings of the chapter On Value in editions 2 and 3 is given at the end of this Introduction.
Ricardo’s original Index is reprinted, with the variants of the editions noted, as described on page 430 below.
To facilitate the identification in the present edition of page-references made in terms of the editions of Ricardo’s Principles most frequently quoted by earlier writers, a Table of Corresponding Pages has been supplied at the end of this volume.
Both in this and in the subsequent volumes of the present edition the author’s footnotes are indicated by asterisks and printed right across the page, whereas the editor’s footnotes are distinguished by numerals and (when the amount of material allows) by being printed in double column.
The editor’s footnotes attempt to indicate Ricardo’s sources in particular passages and to complete his references to authorities. The references to Adam Smith have been supplemented with the corresponding pages of Cannan’s edition of the Wealth of Nations (2 vols., London, Methuen, 1904).
The spelling and punctuation of the original have been retained. Misprints if obvious have been corrected, but those which give a conceivable alternative reading have been left unchanged; in both cases attention has generally been drawn to them in a footnote.
[1 ]Letter of 18 August 1815, below, VI, 249. Cp. Grenfell’s reference in a letter of 1 August 1815 to ‘the work which you have in Contemplation on the Corn Trade’ (below, VI, 242), which was no doubt an allusion to an enlargement of the Essay (whose full title refers to the ‘Price of Corn’ and ‘Restrictions on Importation’).
[2 ]Letter of 23 August 1815, below, VI, 252.
[3 ]Below, VI, 309.
[1 ]Below, VI, 315–16.
[2 ]ib. 314.
[3 ]ib. 321.
[4 ]Letter to Malthus, 7 Feb. 1816, below, VII, 19.
[5 ]Below, VI, 326.
[6 ]ib. 330.
[7 ]ib. 338–40.
[8 ]ib. 348.
[1 ]Below, VII, 20.
[2 ]ib. 60.
[3 ]Letter to Malthus, 24 April 1816, ib. 28.
[4 ]Letter to Malthus, 28 May 1816, ib. 36.
[5 ]ib. 54.
[6 ]ib. 58.
[7 ]ib. 60.
[8 ]Ricardo to Mill, 8 September, and Mill to Ricardo, 6 October 1816, ib. 65–6, 73.
[9 ]ib. 82–4.
[10 ]ib. 71.
[1 ]Below, VII, 83–4. Cp. Trower’s reference to the ‘two months’ lost by Ricardo in ascertaining the error of his own theory (ib. 95).
[2 ]ib. 82.
[3 ]ib. 98–9.
[1 ]ib. 82.
[2 ]So much material (the last part of the chapter On Value) was inserted between the two arguments on profits and on rent that the connection between them was obscured. Indeed, in edition 3 the passage establishing that connection (p. 22–3, n. 3) is omitted altogether; while, somewhat incongruously, the opening sentence of the chapter On Rent, which presupposes that connection (‘It remains however to be considered’), is preserved in all editions. Cp. also p. 78, n. 1.
[1 ]Below, VII, 87–8, 106.
[2 ]ib. 107.
[3 ]ib. 115.
[4 ]Letter to Mill, 17 Nov. 1816, ib. 88.
[5 ]ib. 100–1, 115.
[6 ]ib. 120 and 139–40.
[7 ]ib. 140.
[1 ]ib. 145.
[2 ]ib. 147.
[3 ]ib. 148.
[4 ]Autobiography, 1873, p. 27.
[5 ]Annual Biography and Obituary, for the Year 1824, p. 374. Mculloch makes a similar statement, probably derived from the above, in the numerous versions of his Life and Writings of Mr. Ricardo (omitting in the later ones any reference to Mill).
[1 ]His obligations to Mill in this respect are summed up by Ricardo in a letter of 2 Dec. 1816: ‘If I am successful in my undertaking it will be to you mainly that my success will be owing, for without your encouragement I do not think that I should have proceeded, and it is to you that I look for assistance of the utmost importance to me—the arranging the different parts, and curtailing what may be superfluous.’ (Below, VII,101.)
[2 ]C. F. Dunbar, ‘Ricardo’s Use of Facts’, in Quarterly Journal of Economics, July 1887, vol. i, p. 475.
[3 ]‘He was with difficulty induced to publish it; and if in writing it he had in view any readers at all, they were chiefly those statesmen and business men with whom he associated. So he purposely omitted many things which were necessary for the logical completeness of his argument, but which they would regard as obvious.’A. Marshall, Principles of Economics, Appendix on ‘Ricardo’s Theory of Value’, 8th ed., p. 813 and cp. p. 761 n.
[4 ]Below, VII, 88.
[5 ]Below, VI, 320–1.
[6 ]ib. 321.
[1 ]ib. 321.
[2 ]Below, p. 106. The old-fashioned use of the negative is a peculiarity of Mill, as Bain points out ( James Mill,p. 426). Another passage in which it occurs (below, p. 64: ‘if wages partook not...’) shows also other signs of, at least, revision by Mill.
[3 ]Below, p. 107.
[4 ]ib. 352.
[5 ]That the first three paragraphs of the Preface are stamped with Mill’s ‘tone and style’ has been noticed by Simon N. Patten, ‘The Interpretation of Ricardo’, in Quarterly Journal of Economics, April 1893, vol. vii, p. 338.
[6 ]Below, pp. 105–9.
[7 ]Compare e.g. the following entries with the passages referred to: ‘Population, increase of, no cause of the rise of rent, 410, 411.’ ‘Labour, Adam Smith’s theory of productive and unproductive labour, considered, 76–77, notes.’ ‘Value, Effects of payment of rent on value, 64, 65.’ ‘Smith, Strictures on his doctrine relative to labour being the sole ultimate standard of the exchangeable value of commodities, 16, 17, 416.’ The same applies to additions to the Index made in ed. 3:e.g. under Taxes, entry stating that a tax on rent ‘discourages cultivation, 173–5.’ (Page-references are to the present edition.)
[8 ]‘Ricardo on Political Economy’, in Monthly Review, Dec. 1820, p. 416.
[1 ]A Critical Dissertation on the Nature, Measures, and Causes of Value, London, Hunter, 1825, pp. 213–14.
[2 ]Below, VII, 108.
[3 ]A number of commentators, from De Quincey to Marx, have suggested ways of rearranging the chapters in a logical order. (See ‘Dialogues of Three Templars’, in De Quincey’s Works, ed. Masson, vol. ix, p.53, and Marx’s Theorien u¨ber den Mehrwert, vol. II, 1, pp. 5–6. For several other attempts see J. H. Hollander, David Ricardo, A Centenary Estimate, Baltimore, 1910, p. 82.)
[4 ]Letter from Mill, 14 August 1816, below, VII, 60.
[5 ]Letter from Mill, 16 Dec. 1816, ib. 108–9. It is interesting that it was only at this late stage in the preparation of the book (December 1816) that Mill put to Ricardo the question whether he would ‘chuse to include in it a view of the whole science’: ‘Or, whether you will content yourself with those parts of the science which you yourself have improved.’ (ib. 107.) To which Ricardo replied that it would be easier for him to publish only those parts which had ‘particularly engaged’ his attention; adding that, if this were favourably received, he might later ‘take a view of the whole science.’ (ib. 112.)
[1 ]Vol. i, p. 196, note: ‘See a Dissertation on the Principles of Taxation, the most profound, by far, which has yet been given to the world, by David Ricardo, Esq. in his work “On the Principles of Political Economy and Taxation.”’ This footnote was no doubt inserted in the proofs which Mill was correcting when he received that part of Ricardo’s MS (cp. below, VII, 106 and 111).
[2 ]Below, VII, 100.
[3 ]Letter tcCulloch, 13 June 1820, below, VIII, 194.
[4 ]Another question which immediately arises out of this subject (and also lacks any obvious connection with Poor Rates) is that of extending the notion of Rent to include the return on such capital as cannot be withdrawn from the land. This was made the subject of a long footnote attached to the end of the chapter on Poor Rates.
[1 ]Below, VII, 107.
[2 ]ib. 112.
[1 ]See Cannan, A Review of Economic Theory, p. 243.
[1 ]First proofs were in page galley, not in the long galley which is usual at the present time.
[2 ]Letter to Malthus of 9 March 1817, below, VII, 140.
[1 ]This is the case in all the copies examined. It would be of interest if a copy were to be found in which the binder had failed to carry out the replacement.
[1 ]For helpful criticism of the above arguments concerning chapter-numbers the editor is indebted to the late Professor Cannan to whom they were submitted in 1931.
[2 ]Generally referred to in these volumes as the Essay on Profits.
[1 ]Ricardo to Trower, 8 March 1814, below, VI, 104. Cp. Essay on Profits, below, IV, 23.
[2 ]See below, VI, 102–5.
[1 ]Letter of 5 Aug. 1814, below, VI, 117–18.
[2 ]ib. 108.
[3 ]Below, IV, 17.
[4 ]The feature of calculating the advances of the farmer in corn is singled out by Malthus as ‘the fault of Mr. Ricardo’s table’; since circulating capital did not consist only of corn, but included ‘tea sugar cloaths &c for the labourers’; so that a rise in the relative price of corn would ‘afford a greater surplus from the land’ (letters of 12, and 14 March 1815, below, VI, 185–7).
[5 ]See the statement that profits depend upon the ‘proportion of the annual labour of the country [which] is devoted to the support of the labourers’, below, p. 48–9, and ‘the same conclusion’ on p. 126 below. Cp. Malthus’s reference to Ricardo’s criterion of wages as ‘the cost in labour of the labourer’s wages’ and to its connection with the rate of profit, below, II, 249–50.
[1 ]Letter of 13 June 1820, below, VIII, 194; cp. also letters to Mill of 16 Nov. 1820, ib. 297, and to McCulloch of 17 Jan. 1821, ib. 337.
[2 ]‘The prices of all commodities must increase if the price of corn be increased.’ (Letter to Malthus, 25 July 1814, below, VI, 114 and cp.108.) See also Note 3 on Bentham, below, III, 270.
[3 ]Below, IV, 21.
[1 ]Below, IV, 19.
[2 ]ib. 35–6.
[3 ]Letter to Mill of 30 Dec. 1815, below, VI, 348.
[1 ]Below, p. 55; and for the case where gold would have to be imported (which would be impossible in the face of a rise of commodity prices), p. 104–5.
[2 ]Letter to Mill, 14 Oct. 1816, below, VII, 82.
[3 ]Below, p. 46.
[4 ]Below, p. 61.
[5 ]2 Dec. 1816, below, VII, 100.
[1 ]Wealth of Nations, Bk. 1, ch. vi, ‘Of the Component Parts of the Price of Commodities’; Cannan’s ed., vol. 1, pp. 50, 51, 52. Later however (ib.p. 147) this is qualified by the observation that rent enters as an effect, not a cause, of price.
[2 ]ib. p. 54.
[3 ]ib. p. 65.
[4 ]Below, p. 22–3, note.
[5 ]A Review of Economic Theory, p. 176. The contrast is particularly striking between the headings given in ed. 2 to the respective Sections (ii and iii –iv) to which Cannan is referring: see the Table of Section-Headings at the end of this Introduction.
[1 ]Letter to Mill, 28 Dec. 1818, below, VII, 377. Editor’s italics.
[2 ]Quarterly Journal of Economics, 1904, vol. xviii, pp. 455–91.
[3 ]ib. pp. 479 and 481.
[4 ]ib. p. 485.
[5 ]Editor’s note to Letters to McCulloch, 1895, p. 72.
[1 ]A Review of Economic Theory, 1929, p. 185 and p. 176. The opposite and unusual view has been put forward by H. Biaujeaud, Essai sur la théorie ricardienne de la valeur, Paris, 1934, p. 125.
[2 ]Below, pp. 53, 56–63, 66.
[3 ]Below, p. 22–3, n. 3.
[1 ]Below, p. 12, n. 1, and cp. p. 20, n. 3.
[2 ]See also the reference in Notes on Malthus (which belong to the time of the revision for ed. 3) to ‘comparatively of very slight effect’ (below, II, 59) and ‘of no great magnitude’ (ib. 101), and cp. ib. 66,82. A similar reference to ‘insignificant in its effects’ is found in a letter to Malthus of 9 Oct. 1820, below, VIII, 279.
[3 ]The Measure of Value, 1823, p. 12, n.
[1 ]Below, VIII, 194.
[2 ]At any rate Professor Hollander’s suggestion that Ricardo’s failure to carry out a ‘thoroughgoing reconstruction’ of this chapter in ed. 3 had anything to do with ‘the urgency of the printer’ (op. cit., p. 484) can be dismissed in view of the ample notice given to the author and the subsequent delays in publishing that edition, described in section vii of this Introduction.
[3 ]Below, viii, 279, 280.
[4 ]ib. 344.
[5 ]E. Cannan, A Review of Economic Theory, p. 174.
[1 ]Ricardo to McCulloch, 21 Aug. 1823, below, IX, p. 358 and cp. p. 377. Cp. also below, p. 17, n. 3. This idea that to every theory of value there corresponds an appropriate ‘invariable measure’ is evidently based on Ricardo’s experience with his own theory, where to the determination of value by embodied labour there corresponds an invariable measure in the shape of a commodity produced by a constant quantity of labour; and in so far as there are exceptions to the theory, to the same extent the accuracy of the measure is affected. This correspondence, however, is a peculiar property of Ricardo’s theory and does not necessarily apply to other theories. Thus there would not seem to be such a relation between the theory that wages determine prices and the ‘labour commanded’ standard (see on the other hand below, p. 16–17).
[2 ]Below, pp. 27, n., and 17, n. 3.
[3 ]Below, p. 17, n. 3.
[4 ]Below, p. 44. He adds that such circumstances ‘disqualify any commodity that can be thought of from being a perfectly accurate measure of value.’
[1 ]Below, p. 63. The italics are the editor’s.
[2 ]Cp. below, IV, 305–6.
[3 ]Below, p. 61 n. and cp. p. 31, n. 2, p. 53, n. 1, p. 58, n. 2.
[4 ]Elements of Political Economy, 1821, p. 185. Cp. Ricardo’s example, below, p. 61, and his reference onp. 59 to capital ‘annually consumed and reproduced, as it is when employed in paying wages’. Malthus also understood it in this way: ‘Mr. Ricardo, in order to illustrate his proposition, has placed it, at a venture, among those commodities where the advances consist solely in the payment of labour, and the returns come in exactly in the year.’ (Principles of Political Economy; below, II, 64–5.)
[5 ]Below, pp. 17, n. 3, 27, n., 55, 87, n. 1, 275.
[6 ]Except where (as in the example onp. 55–6) all commodities, including money, are explicitly assumed to be produced with the same proportions of fixed and circulating capitals.
[7 ]Below, p. 66.
[1 ]Below, p. 58.
[2 ]Below, p. 58, nn. 1 and 4.
[3 ]Below, p. 63, n. 3. This latter change was the result of summing up in this sentence (which in ed. 2 becomes the conclusion of a Section) the three possible causes of a rise of commodities. Since one of these causes was a fall in value of the medium itself, this precluded the use of the term ‘absolute price’ (which presupposes an invariable medium).
[4 ]Below, II, 62–4.
[5 ]ib. 64.
[1 ]Below, II, 62–3. This admission of a rise is made rather grudgingly (‘in a trifling degree’, and cp. ib. n. 7).
[2 ]First in a letter of 10 Sept. 1819, below, VIII, 64–5, and then in his Principles of Political Economy, below, II, 81.
[3 ]Below, II, 81. As Ricardo later wrote to McCulloch: ‘Malthus has supposed a case of a man by a day’s labour being enabled to pick up a certain number of grains of gold or silver on the sea shore;—suppose he could pick up as much silver as we coin into a shilling, labour never could fall below a shilling a day, and if corn rose in silver labour could not rise’ (below, VIII, 343).
[4 ]Ricardo to McCulloch, 25 Jan. 1821, ib. 344.
[5 ]ib. 193.
[6 ]Below, p. 45.
[7 ]Below, p. 35, p. 43, n. 4, p. 48, n. 3.
[1 ]Letter to McCulloch, 13 June 1820, below, VIII, 193.
[2 ]Below, IV, 357ff.
[3 ]Below, IV, 405.
[4 ]Below, p. 45–6.
[5 ]Below, IV, 405.
[1 ]Below, p. 21 and cp. p. 63.
[2 ]Below, pp. 42–3.
[3 ]To Malthus, 9 Oct. 1820, below, VIII, 279; to McCulloch, 25 Jan. 1821, ib. 344; to Trower, 4 July (as ‘positive value’) and 22 Aug. 1821, IX, 1–2 and 38; and frequently in 1823, ib. 297–300, 346, 356, 377–8.
[4 ]Below, IV, 399 n. See a similar statement in Principles, below, p. 43.
[5 ]Below, IV, 397.
[6 ]As the context shows, ‘natural’ here stands for ‘absolute’.
[7 ]Below, IV, 375.
[8 ]ib. 368.
[1 ]ib. 373.
[2 ]Draft letter to McCulloch, 15 Aug. 1823, below, IX, 355–6. Cp. the phrase ‘It must then be confessed that there is no such thing in nature as a perfect measure of value’, below, IV, 404; also a similar expression below, IX, 361, and the closing sentence of his last letter (to Mill, 5 Sept. 1823), ib. 387.
[3 ]Below, IV, 405; quoted more fully above, p. xlv.
[1 ]In ed. 2 a statement about ‘unequal value’ is introduced casually below, p. 62, n. In ed. 3 this aspect is considered below, p. 34 and p. 37, second and fourth paragraphs. Cp. also letter to Malthus, 9 Oct. 1820, below, VIII,279.
[2 ]See the Preface to the Principles, and also the oft-quoted passage on the problem of Political Economy in the letter to Malthus of 9 Oct. 1820, below, VIII, 278.
[3 ]Above, p. xxxiii.
[1 ]Below, IX, 357.
[2 ]Below, IX, 359–60 and note. Cp. also the paper on value of the same period, below, IV, 393–4.
[3 ]Of ed. 2 and ed. 3 1000 each were printed. These figures have been kindly supplied by Sir John Murray from the records of his firm.
[4 ]Ricardo to Trower, 15 June 1817, below, VII, 162.
[1 ]Ricardo to McCulloch, 24 Nov. 1818, ib. 337. According to Mallet it was this review which ‘got off the first edition’ (below, VIII, 152, n. 2). In October Malthus wrote: ‘I hear the sale of your work goes on swimmingly’ (below, VII, 312).
[2 ]ib. 327.
[3 ]ib. 328 and 331.
[4 ]ib. 331.
[5 ]Advt. in The Times. The price was stated as 14s.
[6 ]Below, VII, 370.
[7 ]Below, p. 413, note.
[8 ]Below, VII, 371–2.
[9 ]Letter to Mill, 22 and 28 Dec. 1818, ib. 371, 379.
[10 ]Letter to Say, 11 Jan. 1820, below VIII, 150.
[1 ]Ricardo to McCulloch, 24 Nov. 1818, below, VII, 337–8. McCulloch sent a number of suggestions (ib. 351–4), several of which were adopted, including: a second passage about taxation which was rewritten in McCulloch’s own words (below, p. 152); part of the pamphlet Economical and Secure Currency was inserted in Chapter XXVII; and the ‘principle of limitation’ was enlarged upon in the discussion of paper money (below, p. 353–4).
[2 ]Below, pp. 96–7, 271. Cp. letter to Mill, below VII, 333.
[3 ]Preface to An Essay on the External Corn Trade, 1815, pp. xiii-xiv.
[4 ]Below, p. 100.
[5 ]Below, p. 60, n.
[6 ]Below, pp. 412 and 428–9. Cp. letters to Malthus, 24 June and 20 Aug. 1818, below, VII, 271, 282–3.
[7 ]For instances in his earlier writings, see below, IV, 22; letter to Malthus, 30 July 1815, below VI, 241; and in later writings: below, II, 63, n. 5, 231, n. 6 and 411; letter to Malthus, 3 Aug. 1823, below, IX, 325.
[8 ]Below, p. 95, n. 3, p. 96, notes 1, 3, 4, p. III, n. 3.
[9 ]Below, p. 94, n. 1, p. 303, n. 2, p. 334, n. 3. In a few cases the expression was retained in ed. 3: see p. 118, p. 145, and Index, under Wages.
[1 ]See e.g. p. 95–6 where all these expressions are used as equivalent.
[2 ]Cp. below, p. 49–50; and cp. p. 274–5 note.
[3 ]Below, p. 19.
[4 ]Principles of Economics, 8th ed., p. 550.
[5 ]As he says in another context, below, IV, 409.
[6 ]In his letter to Murray of 23 Nov. 1818 Ricardo mentions 4 sections, but in his letter to Mill of the same date (sent through Murray the next day) ‘four’ is altered to ‘five’ (below, VII, 331, 333, n. 1).
[7 ]Below, p. 22, n. 2. See the Table of Section-Headings of Chapter I, below, p. lxiii.
[1 ]Cp. also the heading of Section iii: ‘The principle stated in the foregoing section...’. This must refer to Section i, which on our supposition originally preceded it immediately. It is also to be noted that the division between Sections i and ii is the only one which was effected without a rewriting of the closing and opening passages; by contrast to what Ricardo said to Mill in his letter of 23 Nov. 1818 about a summary ‘at the end of each section’ (below, VII, 333).
[2 ]Below, p. 53, n. 1.
[3 ]Below, p. 66.
[4 ]Below, VIII, 315.
[5 ]ib. 206, 213.
[6 ]Ricardo to Trower, 14 Jan. 1821, ib. 333.
[1 ]Below, VIII, 229.
[2 ]Letter of 14 Oct. 1820, ib. 283–4.
[3 ]Monthly Literary Advertiser, 10 Jan. 1821.
[4 ]Below, VIII, 333, and cp. 335.
[5 ]ib. 342.
[6 ]Letter to Professor Prévost of Geneva, published by G. W. Zinke in Journal of Economic History, May 1942, vol. ii, p. 181.
[7 ]Below, VIII, 373.
[8 ]ib. 379.
[1 ]ib. 333.
[2 ]ib. 373.
[3 ]Below, p. 81.
[4 ]Below, II, 117.
[5 ]ib. 118.
[6 ]Below, p. 335. However, the statement on the same page that ‘the interest of the landlord is always opposed to that of consumer and manufacturer’ remains in ed. 3.
[1 ]Below, II, 195.
[2 ]ib. 196–7.
[3 ]ib. 197 and 198, n. 2. In the Essay on Profits Ricardo, apparently referring to the net, rather than the gross, produce, had made the more sweeping statement: ‘The landlord not only obtains a greater produce, but a larger share.’ (Below, IV, 18.) This is an instance of a more general change that is noticeable between the Essay on Profits and ed. 3 of the Principles: namely, a gradual shift of emphasis from the antithesis of rent and profits to that of wages and profits.
[4 ]Below, II, 196–7, n. 1.
[5 ]Below, p. 83 and cp. p 49, n. 1 and pp. 402–3.
[1 ]See below, VIII, 301.
[2 ]Below, pp. 279–285.
[3 ]Below, pp. 287–8.
[4 ]Below, VIII, 315.
[5 ]Below, p. 249, p. 264 and p. 348.
[6 ]Below, p. 388.
[7 ]Below, p. 392.
[8 ]Below, IV, 35.
[1 ]16 Dec. 1819, below, V, 30. That it was generally accepted that Ricardo held these views is shown by Malthus’ statement in his Principles of Political Economy: ‘I quite agree with Mr. Ricardo, however, in approving all saving of labour and inventions in machinery’ (below, II, 381).
[2 ]Cp. Ricardo’s letter to Barton of 20 May 1817, which however was prior to the publication of the pamphlet (below, VII, 157–9).
[3 ]Edinburgh Review, Jan. 1820, p. 171.
[4 ]Letter to McCulloch, 29 March 1820, below, VIII, 171.
[5 ]Edinburgh Review, March 1821, p. 115.
[6 ]McCulloch to Ricardo, 5 June 1821, below, VIII, 382. He also says that if Ricardo’s new opinion is correct ‘the laws against the Luddites are a disgrace to the Statute book’ (ib. 385).
[1 ]Below, II, 234–6.
[2 ]ib. 234–6.
[3 ]ib. 239 and cp. footnote. Ricardo, however, in Note 243 states that ‘unmixed advantages’ are derived from inventions to save labour (ib.365).
[4 ]Below, p. 388.
[1 ]In Political Economy Club, Centenary Volume, 1921, pp. 211–12. The occasion referred to may have been the dinner party of 12 Jan. 1820, on which see below, VIII, 152–3, n.
[2 ]See letter to Malthus of that date, ib. 311.
[3 ]ib. 377.
[4 ]ib. 373.
[5 ]Letter of 18 June 1821, ib. 390.
[* ][Thus in the 1951 edition. In this 2004 edition the Tables of Concordance between editions 1 and 3 and between editions 2 and 4 have been placed at the end of this Introduction on pp. lxiv and lxv, respectively. All such changes in this edition will be explained in footnotes enclosed within square brackets and indicated by asterisks.]