LI.

LONDON, _14th Oct., 1816_.

MY DEAR SIR,

My stay in London will not be prolonged beyond Friday next. I hope it will be convenient to you to come up before. On Thursday I shall be disengaged and will meet you at any place in London that may best suit you, unless you will dine with me at my brother's at Bow. His house is small, and I fear he has not, now we are with him, a spare bed to offer, and you may not like to travel so far at night. If so, let us meet in the city and get our dinner there.

The money wages of labour are, I apprehend, generally regulated by facility of production. With an abundant production too I think that a less proportion of the whole will be given to the landlords, and more will remain for the other two cla.s.ses, of capitalists and labourers; but of this increased quant.i.ty a greater proportion will be given to capitalists and a less proportion to labourers. Now, though what you call the real wages of labour[140] (but which I think a wrong term) will increase, the money wages will fall. But this will not be the case with profits; what you would call real profits would increase, but so would also money profits. Under the circ.u.mstances then that I have supposed, the rate of profits would rise though money wages would fall. The difference between us is this. I say that with every facility or difficulty of production, of the quant.i.ty of necessaries, that is to be divided between profits and wages, different proportions will be given to each, and that money will accurately show those proportions. You appear to me to think that profits do not depend on the division of the produce, and that money wages may as often rise with facility of production as fall.

You state the real question fairly; it is, 'What is the main cause which determines the rate of profits under all the varying degrees of productiveness?' You do not appear to me [to] solve the question when you answer 'that it is the proportion which capital bears to labour.' In a rich country where profits are low, and where a great portion of produce is paid to the landlords for rent, the proportion of labour to capital will be the greatest, and yet according to your theory it should be the least. You will not, I think, deny that in a country where labour is high a manufacturer would employ more capital to produce the same commodities than what he would do in a country where wages were low, and there also would profits be low; that is to say, profits are high where capital bears a large proportion to labour, and low where labour bears a large proportion to capital.

I am writing amidst the noise of the Stock Exchange, and very much fear that I shall be more than usually incomprehensible.

Ever yours, DAVID RICARDO.

LII.

GATCOMB PARK, _3rd Jan., 1817_.

MY DEAR SIR,

A long time has elapsed since I had the pleasure of seeing you, during which time I have often intended writing, as I did not hear from you; but my natural indolence prevailed, and I have procrastinated it till now. I had some faint hopes that you might be in the neighbouring county this vacation, in which case I should have hoped to prevail on you to pa.s.s a short time here; but I learnt from Mr. Binda, who is on a visit to Mr. Smith, that he had met with you at Holland House, and that it was not probable you would go far from home. I had previously enquired about you of our young neighbour George Clerk; he, however, could only tell me you were well; he knew nothing about your intended movements.

By an advertis.e.m.e.nt in the public papers I perceive that you have been occupied in writing about your College[141], which I regret, as I believe the task was not very agreeable to you, and as it may have prevented you from proceeding with other works in which I imagine you are more interested. I should be glad to hear that everything you think defective in the College was remedied, and that it was placed on such a footing as to require only the ordinary routine of your attention.

I have been occasionally employed, since we met, in putting my thoughts on paper, on the subjects which have often pa.s.sed under our discussion.

I have encountered the usual obstacles from difficulties of composition; but I have resolutely persevered till I have committed everything to paper that was floating in my mind. There are a few points on which there is a shadow of difference between my present and my past opinions; but they are not those on which we could not agree. I hope I shall succeed in putting my MS. in some tolerable order, as on that will depend whether I shall again appear before the public. What I have hitherto done is rather a statement of my own opinions than an attempt at the refutation of the opinions of others. Lately, however, I have been looking over Adam Smith, Say, and Buchanan, and where I have seen pa.s.sages in their works contrary to the principles I hold to be correct I have noticed them, and shall perhaps make them the subject of some comment.

I fear I shall not have the satisfaction of receiving your acquiescence to my doctrines, particularly as I have reverted to my former views respecting taxes on raw produce. Whatever may be correct on that subject, surely Adam Smith is wrong, as there are various pa.s.sages in his book inconsistent with each other.

We shall, I hope, soon meet and renew our discussions on some of these difficult matters. I shall be in London on Friday next, and hope to see you in Brook Street as our inmate, as soon after that day as business or inclination may draw you to London.

I want to hear your opinion of the measures lately adopted for the relief of the poor[142]. I am not one of those who think that the raising of funds for the purpose of employing the poor is a very efficacious mode of relief, as it diverts those funds from other employments which would be equally if not more productive to the community. That part of the capital which employs the poor on the roads, for example, cannot fail to employ men somewhere, and I believe every interference is prejudicial....

Believe me, Ever yours, DAVID RICARDO.

LIII.

UPPER BROOK STREET, LONDON, _24 Jan., 1817_.

MY DEAR SIR,

I have read your pamphlet[143] with great pleasure, and am very much satisfied with your arguments in favour of a college in preference to a school for the education of the young men destined to manage the complicated affairs of our Indian Empire. The testimonies from India in favour of the young men sent from the College, as compared with those who went out to India before the establishment of the College make powerfully for you, and do not appear to have been answered by your opponents. I observe by the papers that the discussion on this subject will be renewed at the India House on the 6th February, at which time I conclude that you will be in London. If so, I hope you will make my house your headquarters. Mr. Murray promised to send copies of your book to the gentlemen you directed me to mention to him.

It appears to me that one great cause of our difference in opinion on the subjects which we have so often discussed is that you have always in your mind the immediate and temporary effects of particular changes, whereas I put these immediate and temporary effects quite aside, and fix my whole attention on the permanent state of things which will result from them. Perhaps you estimate these temporary effects too highly, whilst I am too much disposed to undervalue them. To manage the subject quite right, they should be carefully distinguished and mentioned, and the due effects ascribed to each.

I have been reading again your three last pamphlets on rent and corn, and cannot help thinking there is some ambiguity in the language. The word [_sic_], 'high price of raw produce,' is calculated to produce a different impression on your reader from what you mean. Your first and third causes of high price appear to me to be directly at variance with each other. The first is the fertility of land, the third the scarcity of fertile land. The second cause too, I think, never operates[144].

There is one pa.s.sage in particular which expresses fully my opinions. I have not the book by me, and cannot refer you to the page, but it begins, 'I have no hesitation in stating that independently of irregularities in the currency,' etc. It is in the essay on Rent[145].

Surely Buchanan is right and your comment[146] wrong; rent is not a creation but a transfer of wealth. It is the necessary consequence of rent being the effect and not the cause of high price[147].

Say and I would say that by turning revenue into capital we shall obtain both an increased supply and an increased demand; but, if the same capital be so created, I do not approve of its present application, and taking it out of the hands of those who know best how to employ it, to encourage industry of a different kind and under the superintendence of those who know nothing of the wants and demands of mankind, and blindly produce cloth or stockings of which we have already too much, or improve roads which n.o.body wishes to travel....

Very truly yours, DAVID RICARDO.

LIV.

MY DEAR SIR,

I am not in the least acquainted with the subject on which your papers[148] treat, but that is no reason why I should not mention what appears to me defective. In page 8[149] you add 1/6 to the births for probable omissions, and 1/12 for deaths; but you do not tell your reader why these proportions are taken rather than 1/4 or 1/3, nor can I discover on what grounds those numbers are chosen.

You sometimes take averages from the known facts of certain years; but your averages are formed on an arithmetical ratio while your application is to a geometrical series. I submit whether this is correct.

If, as you say in page 14[150], births are to burials as 47 to 30, and the mortality as 1 to 47, the addition to the population would be little more than 1/82 instead of 1/83, for out of every 1410 persons 30 would die and 47 would be born, and consequently there would be an increase of 17; but 1410 divided by 17 is 82.94, or 83 nearly; and therefore, if 1410 gives an increase of 17, 9,287,000 will give an increase of 111,970, or 1,119,700 in ten years, which will raise the population 9,287,000 + 1,119,700 = 10,406,700 instead of 10,483,000[151].

In page 16[152] the mortality is supposed to be as before, 1 in 47, and the births to the population as 1 to 29-1/2, and the population to be 9,287,000. This latter sum divided by 29-1/2 gives 314,813 the annual number of births, and divided by 47 gives 197,595 the annual number of deaths; deduct one from the other (197,595 from 314,813) gives 117,218 for the annual increase, which in ten years would be 1,172,180, which added to the former population of 9,287,000 gives 10,459,180 instead of 10,531,000.

I have marked in pages 35 and 36 some very trifling errors. These are all I can discover with the facts which are before me.

Ever truly yours, DAVID RICARDO.

_8 Feb., 1817._

LV.

LONDON, _21 Feb., 1817_.

MY DEAR SIR,

I am very sorry that you were prevented from being in London yesterday.

I fully expected to see you, as I thought the subject of debate at the India House was of too much interest not to make you desirous of hearing it.

Mr. Grant[153] was, I a.s.sure you, a warm advocate in the cause of the College. He spake admirably and with great effect, improving in energy and eloquence as he proceeded. He did justice to the various qualifications of the professors for the responsible situations which they filled, and I believe left nothing unsaid which might a.s.sist the cause which he so ably defended. I thought him very severe on Randle Jackson, who will find it difficult to answer some parts of his speech.