Since I received your last letter I have been unexpectedly called from
home, besides having had friends staying with me, which have prevented
me from writing sooner. I have been twice to Bath and once to
Cheltenham, and have also been as far as Devonshire, to the old Abbey
which Mr. Bentham[69] at present inhabits. I accompanied M. Say, the
author of Economie Politique, on a visit to him and Mr. Mill[70];--and,
had it not been for the incessant rain, we should have had a very
pleasant excursion. M. Say came to me here from London at the request of
Mr. Mill, who wished us to be acquainted with each other. He intends
seeing you before he quits this country. He does not appear to me to be
ready in conversation on the subject on which he has very ably
written,--and indeed in his book there are many points which I think are
very far from being satisfactorily established,--yet he is an unaffected
agreeable man, and I found him an instructive companion.
We intend to be in London in the middle of January, and have little
doubt that we shall return here quite time enough to receive a visit
from Mrs. Malthus and you next summer vacation, so I trust you will not
project an excursion to any other quarter.
I perceive that we are not nearly agreed on the subject which we have
been lately discussing. I have been endeavouring to get you to admit
that the profits on stock employed in manufactures and commerce are
seldom permanently lowered or raised by any other cause than by the
cheapness or dearness of necessaries, or of those objects on which the
wages of labour are expended. Accumulation of capital has a tendency to
lower profits. Why? because every accumulation is attended with
increased difficulty in obtaining food, unless it is accompanied with
improvements in agriculture; in which case it has no tendency to
diminish profits. If there were no increased difficulty, profits would
never fall, because there are no other limits to the profitable
production of manufactures but the rise of wages. If with every
accumulation of capital we could tack a piece of fresh fertile land to
our Island, profits would never fall. I admit at the same time that
commerce, or machinery, may produce an abundance and cheapness of
commodities, and if they affect the prices of those commodities on which
the wages of labour are expended they will so far raise profits:--but
then it will be true that less capital will be employed on the land, for
the wages paid for labour form a part of that capital. A diminution of
the proportion of produce, in consequence of the accumulation of
capital, does not fall wholly on the owner of stock, but is shared with
him by the labourers. The whole amount of wages paid will be greater,
but the portion paid to each man will in all probability be somewhat
diminished.
I do not recollect ever having allowed that an extension of foreign
commerce will take capital from the land, unless we were an exporting
country as far as regards corn, in which case my proposition would be
true, namely that the rate of profits can never permanently rise unless
capital be withdrawn from the land. I am not sanguine about the
principle, if true, being of any use; but that is another
consideration;--its utility has nothing to do with its truth, and it is
the latter only which I am at present anxious to establish. I cannot
agree with you when you say that 'without supposing capital to be taken
from the land the throwing of new objects of desire into the market will
increase the value of the whole mass of commodities in the country,
estimated either in money, or in corn and labour,'--and it is because I
think that there will not be a greater value of commodities to be
exchanged for the raw produce, or for money, that I conclude no
increased profits will anywhere be made. If the mass of commodities be
increased we diminish their exchangeable value as compared with those
things whose quantity is not augmented. If we double the quantity, or
rather double the facility of making stockings, we diminish their value
one half, as compared with _all_ other commodities. If we do the same
with regard to hats and shoes, we restore the accustomed relations
between stockings, hats, and shoes, but not with respect to other
things. It is here, I think, that our difference rests, and I hope soon
to hear all that you have to advance in favour of your view of the
question.
M. Say, in the new edition of his book, p. 99, vol. i, supports, I
think, the very [same] doctrine that demand is regulated by production.
Demand [is] always an exchange of one commodity for another. The
shoemaker when he exchanges his shoes for bread has an effective demand
for bread, as well as the baker has an effective demand for shoes,--and,
although it is clear that the shoemaker's demand for bread must be
limited by his wants, yet whilst he has shoes to offer in exchange he
will have an effective demand for other things,--and if his shoes are
not in demand it shows that he has not been governed by the just
principles of trade, and that he has not used his capital and his labour
in the manufacture of the commodity required by the society,--more
caution will enable him to correct his error in his future production.
Accumulation necessarily increases production and as necessarily
increases consumption. Accumulation of _produce_, if properly selected,
_may_ always be accumulation of _capital_, and it cannot fail to be
worth more than it cost, estimated in corn or labour,--and this I think
would be true although all our soldiers, sailors, and menial servants
were employed in productive labour. It appears to me that the
consideration of money value may be the foundation of our difference on
this point.
I must leave room for a request which I hope you will not refuse. I
dined a little while ago at Mr. Smith's, whom I first met at your house.
Mrs. Smith told me that she had a collection of the handwriting of a
great number of men who had distinguished themselves by their writings,
and she wished that I would give her a letter of yours to add to her
collection. Knowing that I had many which would not discredit you, I
assented; but after I came home I thought I had no right to do it
without your consent--which I hope you will not refuse. I should be
sorry to disappoint her, and should really cut a poor figure in making
my apologies if I did; yet, as my opinion, that I should not do it
without your consent, is confirmed by Mrs. Ricardo, I must falter out
my excuses if you are inexorable. With kind regards to Mrs. Malthus,
I am, ever yours truly,
DAVID RICARDO.
NOTE.--Of Ricardo, Bentham used to say: 'I was the spiritual father
of Mill, and Mill was the spiritual father of Ricardo; so that
Ricardo was my spiritual grandson. I was often _tete a tete_ with
Ricardo. He would borrow a sixpenny book instead of buying it. There
was an _epanchement_ between us. We used to walk together in Hyde
Park, and he reported to me what passed in the House of Commons. He
had several times intended to quote the 'Fragment'; but his courage
failed him as he told me. In Ricardo's book on rent there is a want
of logic. I wanted him to correct it on these principles; but he was
not conscious of it, and Mill was not desirous. He confounded _cost_
with _value_. Considering our intercourse it was natural he should
give me a copy of his book;--the devil a bit!' (Life by Bowring in
Works, vol. x. p. 498.) Then follows a letter to Ricardo, in which
Bentham compliments him on his political progress: 'I told Burdett
you had got down to _trienniality_, and were wavering between that
and annuality, where I could not help flattering myself you would
fix,--also, in respect of extent, down to _householders_, for which,
though I should prefer universality on account of its simplicity and
unexclusiveness, I myself should be glad to compound.' The
suggestion of stinginess made by Bentham in the passage quoted is
sufficiently rebutted by Bentham's own biographer, who tells us
Ricardo was one of those who guaranteed the funds for Bentham's
Chrestomathic School (Bentham, Works, x. p. 484), and by James Mill
(Biography, p. 191), when he speaks of Ricardo's unwillingness to
accept payment for his article (Sinking Fund) in the Encyclopaedia
Britannica on the grounds that, first, it was not worth payment,
second, payment was no part of his inducement to write it.
The influence of Bentham on Ricardo's general ways of thinking is
discussed elsewhere. In economical theory (if we judge Bentham by
his 'Manual of Political Economy,' which was written some years
before this time, though not published in England till long
afterwards) there was no more than a general agreement between the
two men.