... I cannot deny myself the pleasure of accepting your kind invitation
for Saturday next. I will be with you at the usual hour.
That we have experienced a great increase of wealth and prosperity since
the commencement of the war, I am amongst the foremost to believe; but
it is not certain that such increase must have been attended by
increased profits, or rather an increased rate of profits, for that is
the question between us. I have little doubt however that for a long
period, during the interval you mention[37], there has been an increased
rate of profits, but it has been accompanied with such decided
improvements of agriculture both here and abroad, for the French
Revolution was exceedingly favourable to the increased production of
food, that it is perfectly reconcileable to my theory. My conclusion is
that there has been a rapid increase of capital, which has been
prevented from showing itself in a low rate of interest by new
facilities in the production of food. I quite agree that an increased
value of particular commodities occasioned by demand has a tendency to
occasion an increased circulation, but always in consequence of the
cheapness of some other commodities. It is therefore their cheapness
which is the immediate cause of the introduction of additional money.
I have not been home since I received your letter. I will look at the
passage you refer me to in Adam Smith[38], and will consider of the
other matters in your letter, so as to be prepared to give you my theory
when we meet.
The facts you have extracted from Wetenhall's tables are curious[39],
and are hardly reconcileable to any theory. I attribute many of them to
the state of confusion into which Europe has been plunged by the extent
and nature of the war; and it would be quite impossible to reason
correctly from them without calculating what the state was of the real
as well as the computed exchange during the periods referred to. Pray
make my best respects to Mrs. Malthus, and believe me,
Truly yours,
DAVID RICARDO.