On my return to London, after a short excursion to Tunbridge Wells, I
found your obliging letter.... On further reflection I am confirmed in
the opinion which I gave with regard to the effect of opening new
markets or extending the old. I most readily allow that since the war
not only the nominal but the real value of our exports and imports has
increased; but I do not see how this admission will favour the view
which you take of the subject.
England may have extended its carrying trade with the capital of other
countries. Instead of exporting sugar and coffee direct from Guadaloupe
and Martinique to the continent of Europe, the planters in those
colonies may first export them to England, and from England to the
continent. In this case the list of our exports and imports will be
swelled without any increase of British capital. The taste for some
foreign commodity may have increased in England at the expense of the
consumption of some home commodity. This would again swell the value of
our exports and imports, but does not prove a general increase of
profits nor any material growth of prosperity.
I am of opinion that the increased value of commodities is always the
effect of an increase either in the quantity of the circulating medium
or in its power, by the improvements in economy [in] its use
[_sic_][34],--and is never the cause[35]. It is the diminished value, I
mean nominal value, of commodities, which is the great cause of the
increased production of the mines; but the increased nominal value of
commodities can never call money into circulation. It is certainly an
effect and not a cause. I am writing in a noisy place; you must
therefore excuse all blunders. I must offer the same apology for my two
half sheets[36]. I did not like to copy the first half over again.
With best compliments to Mrs. Malthus, I remain,
Yours very sincerely,
DAVID RICARDO.