... I am very glad to hear of your intention of paying me a visit here.
I hope it will be for a longer time than you mention. I am desired by
Mrs. Ricardo to say that it would give her great pleasure to see Mrs.
Malthus and your three children.... There is a coach which leaves London
three times a week at five o'clock in the evening, on Monday, Wednesday,
and Friday. This coach goes to Minchinhampton, one mile from our house;
it carries four inside, travels at a very good pace, and sets off from
the Angel Inn, St. Martin's-le-Grand. There is also a morning coach
which goes from Gerard's Hall, Basing Lane, Cheapside, three times a
week in the morning at a quarter before six. I believe this coach goes
on Tuesday, Thursday, and Saturday; it is a Stroud coach and does not
come nearer to our house than within four miles on the Cirencester Road.
If you prefer this coach, we will send for you to the place where the
roads diverge. This is of course in case Mrs. Malthus does not accompany
you....
It is true the case[236] in my book is stated to be temporary, and in my
opinion it can only be temporary because it cannot exist when the
population has increased with the demand for people. When we meet we
must agree upon the meaning to be attached to 'a neat surplus from the
land'; it may mean the whole material produce after deducting from it
what is absolutely necessary to feed the men who obtained it, or it may
mean the value of the produce which falls to the share of the
capitalist, or to the share of the capitalist and landlord together. If
the first be neat surplus it is equally so whether given to labourers,
capitalists, or landlords. If the second it may fall short of giving as
great a value to the capitalist as he expended in obtaining it, and
therefore for him there would be no neat produce. This term neat produce
is used ambiguously in your book, and is made the ground of an
observation on something [which I s]aid about neat and gross produce.
The observation is [just] or not just, according to the meaning attached
to the term neat produce; but more of this when we meet.
Knowing as I do how much we are influenced by taking a particular view
of a subject, and how difficult it is to destroy a train of ideas which
have long followed each other in the mind, I will not say I am right
about the effects of unproductive demand, and therefore it is possible
that five years hence I may think as you do on the subject, but at
present I do not see the least probability of such a change, for every
renewed consideration of the question confirms me in the opinion which I
have long held.
Ever truly yours,
DAVID RICARDO.
NOTE.--On the 8th May, 1821, Ricardo writes to J. B. Say from
London (Say, Oeuvres Diverses, p. 416), acknowledging receipt of
Say's 'Letters to Malthus,' and sending him an early copy of the
3rd edition of his 'Pol. Econ. and Tax.' He finds fault again with
Say's use of the word Value. He adopts Say's doctrine of
'productive services'; but 'rent being the effect and not the cause
of the rise of prices, I submit afresh to you the question whether
it is not well to leave rent out of account when we are estimating
the comparative value of the productions of the soil. Suppose that
I have before me two loaves, the one from the best land in the
country, a land yielding three or four pounds sterling per acre,
the other from a land rented at about three or four shillings. The
two are precisely of the same quality and the same price. You would
say that the price of the one is largely a payment for the service
of the soil, while it gives little profit for the capital and the
labour that have made that land produce. This is incontestable; but
what consequence can you draw from it for our practical guidance?
What we want to know is the general law which regulates the value
of bread relatively to the value of all other things; and I believe
that we shall find that one of those loaves, the one that comes
from the land that pays little or no rent, determines the value of
the whole of the bread; consequently its value, compared with that
of all other things, depends on the quantity of labour employed in
its production, comparatively with the quantity of labour employed
in every other production. Your book (the Traite) would have gained
much if you had considered the laws of rent and profits more
deeply: 'Adam Smith was certainly wrong in supposing that the rate
of profits depends on the amount of accumulated capitals without
regard to the population, and the means of providing for it.' In
other points I agree with your book and with the greater part of
your 'Letters to Malthus.' 'Mr. Malthus and I see each other
frequently, without convincing one another. I am glad to be able to
inform you that economical science is more and more studied by the
youth of this country. We have recently formed a club of political
economists, in which we are proud to include Messrs. Torrens,
Malthus, and Mill. Many others besides are actively maintaining the
principles of free trade, though their names are not so well known
to the public.'
In his reply (Paris, 19th July, 1821) Say points out that Ricardo
neglects the distinction between 'natural wealth' and 'social
wealth,' or he would agree more than he does with Say in his view
of value. 'Value in use,' if it means anything, means utility pure
and simple, and we may leave out the 'value.' But utility may be
gratuitously presented to us by nature, or added by our labour and
outlay. We measure the new utility thus added, not as you say by
the _quantity of labour_ it costs us, but by the different
_quantities of another product_ which are given for it (for the new
utility not for the nature-given utility) by others. For instance,
a pound of iron is perhaps 2000 times less valuable than a pound of
gold, though the utility of the iron may be equal, if not
superior, to that of the gold; and the reason is that nearly all
the utility of the iron is a gratuitous gift of nature to us. I
neglect, therefore, the distinction of value in use and value in
exchange deliberately, for I think Political Economy has to do only
with the latter. As to the two loaves, the phenomenon you speak of
is due, first, to the appropriation of land, apart from which such
produce of the soil as was got without labour would cost nothing to
anybody,--second, taking things as they are, to the fact that
progress in production essentially consists in the substitution of
nature's gratuitous services for our own costly ones--our ideal
being the complete displacement of the latter by the former, which
would make us all 'richer than David Ricardo.' Again, I consider
that the determining causes of value include the causes that
influence demand as well as supply, the cost to the demander of the
productive services he offers in exchange, and not only the cost in
labour of the article supplied. I am glad to hear of your Club.
'What I desire above all is that such economical principles as are
not abstract, but are only the frank exposition of facts and their
consequences, should be diffused among all classes of citizens. We
have need not of controversialists expert in syllogistic weapons,
but of practical economists; and all that is wanted, for that, is
notions accessible to plain common sense, which I fear we repel by
our too abstract reasonings.' If you admit strangers, I should be
glad to be a member. He adds in a postscript that his eulogies (in
the letters to Malthus) of the Essay on Population have been taken
by some English writers as ironical; and he would like Ricardo to
tell Malthus this is not so; he considers the position of the Essay
impregnable, and has a genuine esteem for the author (Oeuvres
Diverses, pp. 418-22). Say was of opinion that the time had not yet
come for setting up a dogmatic orthodoxy in economical doctrines;
and he begins the above letter by saying to Ricardo:--'I see in
your book a new proof that the subjects of political economy are
prodigiously complicated, for, though you and I are both seeking
the truth in good faith, yet after devoting whole years to sounding
the depths of its fundamental questions we find several points on
which we do not agree. It is well we are agreed on the essential
point, the possibility of the progress of man in wealth and
happiness, as well as on the means needful to that end. We reach
the same conclusions, though sometimes in different ways' (p. 418).