I left London on the 19th, the day before your letter arrived there,
having dispatched all my business in four days. The appearance of the
Omnium was not sufficiently inviting to induce me to protract my stay
longer than was absolutely necessary. David[63], who is come to pass
his holidays with us, brought me your letter. I regret that I shall not
see you for some time, as you cannot come here, and I shall not have it
in my power at present to visit Hail[e]ybury. I expected to have a great
deal of leisure time in the country, but as yet I have not had any.
Walking and riding with my family, and friends who have visited us, have
entirely occupied me; besides which, the only room in my house which is
not finished is the library, owing to the tedious time which they have
taken to fix my bookcases.
I think if we could talk together we should not _very_ much differ on
the question which has lately engaged us; our principal difference is
about the permanence of the effects. It will often happen that the
scarcity of a commodity or the increasing demand for it will for a time
increase profits; but it is not therefore correct to say that, where
profits are high, they are so because the demand for produce is great
compared with supply. There are many other causes which will occasion
profits to be permanently high. There may be two countries, in one of
which, from bad government and the consequent insecurity of property, or
from the little disposition to saving in the people, profits may be
permanently high and interest at 12 per cent., whilst in the other,
where these causes do not operate, profits may be permanently low and
interest at 5 per cent. It would surely be incorrect to say that the
cause of the high profits was the greater proportion of demand for
produce, when in both countries the supply would be or might be
precisely equal to the demand and no more. In America profits are higher
than in England, and yet I can have no doubt that the proportion of
supply to demand is greater in the former country. I think it must
necessarily be so in all countries which are most rapidly increasing in
riches, for from whence do riches come but from production
preponderating over consumption? Profits are sometimes high when corn is
scarce and dear; but this arises from the stimulus which the high prices
give to industry. If the population could immediately accommodate itself
to the scanty supply, no such effects would follow; and in fact they
only continue till time has gradually equalised them.
I sometimes suspect that we do not attach the same meaning to the word
'demand.' If corn rises in price, [you] perhaps attribute it to a
greater demand. I should [attribute it to] a greater competition. The
demand cannot, I think, be said to increase if the quantity consumed be
diminished, although much more money may be required to purchase the
smaller than the larger quantity. If it were to be asked what the demand
was for port-wine in England in the years 1813 and 1814, and it were to
be answered that in the first year she had imported 5000 pipes, and in
the next 4500, should we not all agree that the demand was greater in
1813? Yet it might be true that double the quantity of money was paid
for the 4500 pipes.
Have you read the report of the Lord[s'] Committee on the Corn question?
It discloses some important facts; but how ignorant the persons giving
evidence appear to be of the subject as a matter of science! The
Editor's remarks too are very unworthy of his paper.
... With best compliments to Mrs. Malthus,
I am, yours truly,
DAVID RICARDO.
NOTE.--The 'Editor' was Lord Hardwicke, who moved for the Committee
10th June, 1814, and presented its report to the House on 23rd Nov.
1814. See Hansard, under date Feb. 17, 1815, p. 796; Ann. Register
1815, Gen. Hist. p. 130. The reports were 'ordered to be printed'
25th July, 1814. The first was on a single sheet, and was simply a
complaint that the Committee could not take evidence; the second
reported that they had heard evidence, but thought that before any
certain conclusions could be reached the inquiry must go on further.
There is a copiously annotated copy of them in the 'Place'
Collection in the British Museum.