Without imputing the least blame to you, I fear that I do not quite
understand your 'knotty point.' You appear to me to compare things
together, which cannot, under any supposable circumstances, be made the
subject of comparison. You compare a commodity, in the production of
which the advances in labour remain the same while the profits of stock
diminish, to another commodity 'obtained by a given quantity of labour,
a given quantity of capital, and a given rate of profits.' Is not this
supposing two rates of profit at the same time? Perhaps this was not
meant, and your question was asked on the supposition of profits varying
equally in all trades. If so, I have no hesitation in answering that,
if, from an increased quantity of labour on the land, corn should appear
to have doubled in money price, and not from any increased facility in
the production of money, we ought to say, as we always do say, that corn
had risen a hundred per cent., and not that money had fallen fifty. In
differing on this point we in reality come to our old dispute, whether
the quantity of labour in a commodity should be the regulator of its
value, or whether the value of all things should, under all
circumstances, be estimated by the quantity of corn for which they would
exchange. You say 'we cannot surely assume that the cost of producing
the necessaries of the labourer is low absolutely when the land is
productive, if what is gained by the small quantity of labour employed
is counterbalanced by the very high rate of profits.' I, of course,
should say the cost of these necessaries was low if they were produced
with little labour, but would not you, who adopt another measure and
_sometimes_ think value is to be estimated by the quantity of things
generally which the commodity could command, would you not say, that the
cost of these necessaries was small in value, agreeing, as you would,
that they would not command an abundance of other things? I do not know
what you mean by the low cost of necessaries being counterbalanced by
the very high rate of profits. If a hundred quarters of corn be to be
divided between my labourers and me, its cost being made up of wages and
profits, its cost will be the same, whether profits be high or low, and
this division will in no degree affect the price of the corn; but, if at
a subsequent time eighty quarters only can be obtained with the same
labour and capital, and in consequence a greater proportion of the
eighty be given to the labourers than was before given of the hundred,
corn will rise absolutely both in my measure and in yours. It is I who
am willing to take some one or more of the external commodities[245] in
the production of which, while the advances in labour increase in money
value, the profits of stock diminish, as a steady measure, but which you
so often reject, and insist that, whether the produce of a given
quantity of labour be a hundred or eighty quarters, in either case, corn
has remained a steady measure of value. In the case you have supposed,
you say that the commodity, in which the same advances for labour were
made, while profits diminished, 'would not only fall one half
relatively to corn, but it would appear to do so estimated in any common
external commodity which had all along been produced by the same
quantity of labour, _and at the same rate of profits_.' I wish you had
named this commodity. In the first place I deny that it would be
produced at the same rate of profits, for there cannot be two rates of
profit at the same time in the same country, and secondly I contend that
this commodity would also fall to one half relatively to corn, and
therefore would appear invariable when compared with the other
commodities.
Perhaps by external commodity, you mean a foreign commodity to be
imported from abroad. If so, why should not that commodity vary in
reference to corn in the same degree as any home made commodity? If a
hogshead of claret were worth a certain quantity of cloth, of hats, of
hardware, etc., etc., would its relative value to these things alter
because it was more difficult to raise corn in England, and its price
rose because we refused to import it from other countries? To me it
appears most clear that claret would not vary as compared with the
things which I before enumerated, and that it would vary as compared
with corn. Pray think of this and tell me whether I am not right. In the
postscript to your letter you ask 'In the two extreme cases of the
highest profits, and the lowest profits on the land, may not corn and
labour remain of the same value estimated in some external commodity,
although in the interval considerable variations may have taken place
from supply and demand?' I answer, no, it could not remain of the same
value estimated in home commodities, and as it is by means of these home
commodities that we should purchase the external commodities, I cannot
see the slightest reason for supposing that these commodities so
exchanged could alter in relative value. I hope I have made myself
understood. I am glad you approach a little towards my views, I wish you
had told me to what extent. Torrens told me he should send me his
book[246]; he has not done so, and I have not seen it.
Ever yours,
DAVID RICARDO.