You think that my theory of a diminishing rate of profit in consequence
of being obliged to cultivate poorer lands is affected by my admission
that there will be a greater quantity of surplus produce and a greater
money value from the old land. This would be true if any part of either
the additional quantity or additional value belonged to the owner of
stock. You, however, expressly say that this additional value or
quantity 'will remain to the farmer and landlord.['] Before my theory is
affected it must be shown that the whole will not remain with the
landlord, as, if the farmer gets no share of it, his rate of profits
cannot be raised.
I agree with you that, when the exchangeable value of corn rises, 'the
whole quantity of corn in the country will exchange for a greater number
of coats than before, and consequently that there will be both the power
and will to purchase, with the raw produce of the country, a greater
quantity of manufactured and foreign commodities.' In a progressive
country I can easily conceive this power and will to be doubled or
trebled, as well as the commodities on which they are exercised; but
this admission does not affect the question of profits. There may be a
great demand for home and foreign commodities without their price being
permanently raised, as no new difficulties may attend their production.
When America becomes populous and wealthy in the same proportion as the
most wealthy country of Europe, will not her corn exchange at a higher
value both for money and commodities, although it will have much
increased in quantity? Will not all foreign and home commodities in
America be double or treble their present amount, yet will not the
profits of stock be less there than they now are? On this question I
could not have thought that the slightest doubt could exist; all theory,
all experience is in favour of this opinion.
Whilst the labour of ten persons employed on land paying no rent can
produce one hundred quarters of wheat, it appears to me possible and
probable that one-third more labour might profitably be employed on that
land, not indeed in producing only one hundred quarters of wheat, but an
additional quantity more than the additional labourers would consume.
Whilst the labour of ten men can produce one hundred quarters of wheat,
it is difficult to suppose profits only ten per cent., and more
difficult to conceive that many more men might not be profitably
employed in increasing the produce off such land. In theory, land which
yields no rent, according to your supposition, would have more and more
capital profitably expended on it, whilst the additional quantity of
produce obtained exceeded [the] quantity paid to the additional
labourers. Capital [might] be so expended, whilst the profits of stock
gave any return, not ten per cent. but one per cent. or a half per cent.
No doubt money varies more slowly than other commodities for the reason
you mention; nevertheless its value, like every other foreign commodity,
depends on the labour and expense of bringing it to market.
I expect some friends to dine with me on Saturday, and on Monday I am
engaged out to dinner; yet, if the weather is tolerably fine, I will be
with you by the time you leave chapel on Sunday, but I must get home
next day. If this is not quite convenient, pray let me know.
Ever yours,
DAVID RICARDO.