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Experience, However, Shows That Neither A State Nor A Bank Ever Have [sic] Had The Unrestricted Power Of Issuing Paper Money Without Abusing That Power; In All States, Therefore, The Issue Of Paper Money Ought To Be Under Some Check And Control; And None Seems So Proper For That Purpose As That Of Subjecting The Issuers Of Paper Money To The Obligation Of Paying Their Notes Either In Gold Coin Or Bullion.

-David Ricardo

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Experience, However, Shows That

David Ricardo

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Experience, However, Shows That Neither A State Nor A Bank Ever Have [sic] Had The Unrestricted Power Of Issuing Paper Money Without Abusing That Power; In All States, Therefore, The Issue Of Paper Money Ought To Be Under Some Check And Control; And None Seems So Proper For That Purpose As That Of Subjecting The Issuers Of Paper Money To The Obligation Of Paying Their Notes Either In Gold Coin Or Bullion.

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Whenever, Then, The Usual And Ordinary Rate Of The Profits Of Agricultural Stock, And All The Outgoings Belonging To The Cultivation Of Land, Are Together Equal To The Value Of The Whole Produce, There Can Be No Rent.

Neither Machines, Nor The Commodities Made By Them, Rise In Real Value, But All Commodities Made By Machines Fall, And Fall In Proportion To Their Durability.

The Farmer And Manufacturer Can No More Live Without Profit Than The Labourer Without Wages.

There Can Be No Rise In The Value Of Labour Without A Fall Of Profits.

I Have Already Expressed My Opinion On This Subject In Treating Of Rent, And Have Now Only Further To Add, That Rent Is A Creation Of Value, As I Understand That Word, But Not A Creation Of Wealth.

As The Revenue Of The Farmer Is Realized In Raw Produce, Or In The Value Of Raw Produce, He Is Interested, As Well As The Landlord, In Its High Exchangeable Value, But A Low Price Of Produce May Be Compensated To Him By A Great Additional Quantity.

A Rise In Wages, From An Alteration In The Value Of Money, Produces A General Effect On Price, And For That Reason It Produces No Real Effect Whatever On Profits.

Possessing Utility, Commodities Derive Their Exchangeable Value From Two Sources: From Their Scarcity, And From The Quantity Of Labour Required To Obtain Them.

There Is No Way Of Keeping Profits Up But By Keeping Wages Down.

For Price Is Everywhere Regulated By The Return Obtained By This Last Portion Of Capital, For Which No Rent Whatever Is Paid.

Neither A State Nor A Bank Ever Have Had Unrestricted Power Of Issuing Paper Money Without Abusing That Power.

Labour, Like All Other Things Which Are Purchased And Sold... Has Its Natural And Its Market Price.

But A Tax On Luxuries Would No Other Effect Than To Raise Their Price. It Would Fall Wholly On The Consumer, And Could Neither Increase Wages Nor Lower Profits.

To Alter The Money Value Of Commodities, By Altering The Value Of Money, And Yet To Raise The Same Money Amount By Taxes, Is Then Undoubtedly To Increase The Burthens Of Society.

The Interest Of The Landlord Is Always Opposed To The Interests Of Every Other Class In The Community.

Labour, Like All Other Things Which Are Purchased And Sold, And Which May Be Increased Or Diminished In Quantity, Has Its Natural And Its Market Price. The Natural Price Of Labour Is That Price Which Is Necessary To Enable The Labourers, On With Another, To Subsist And To Perpetuate Their Race, Without Either Increase Or Diminution.

A Rise Of Wages From This Cause Will, Indeed, Be Invariably Accompanied By A Rise In The Price Of Commodities; But In Such Cases, It Will Be Found That Labour And All Commodities Have Not Varied In Regard To Each Other, And That The Variation Has Been Confined To Money.

A Bounty On The Exportation Of Corn Tends To Lower Its Price To The Foreign Consumer, But It Has No Permanent Effect On Its Price In The Home Market.

Gold, On The Contrary, Though Of Little Use Compared With Air Or Water, Will Exchange For A Great Quantity Of Other Goods.

The Exchangeable Value Of All Commodities Rises As The Difficulties Of Their Production Increase.

Profits Might Also Increase, Because Improvements Might Take Place In Agriculture, Or In The Implements Of Husbandry, Which Would Augment The Produce With The Same Cost Of Production.

By Far The Greatest Part Of Those Goods Which Are The Objects Of Desire, Are Procured By Labour And They May Be Multiplied, Not In One Country Alone, But In Many, Almost Without Any Assignable Limit, If We Are Disposed To Bestow The Labour Necessary To Obtain Them.

No Extension Of Foreign Trade Will Immediately Increase The Amount Of Value In A Country, Although It Will Very Powerfully Contribute To Increase The Mass Of Commodities And Therefore The Sum Of Enjoyments.

Gold And Silver, Like Other Commodities, Have An Intrinsic Value, Which Is Not Arbitrary, But Is Dependent On Their Scarcity, The Quantity Of Labour Bestowed In Procuring Them, And The Value Of The Capital Employed In The Mines Which Produce Them.

The Demand For Money Is Regulated Entirely By Its Value, And Its Value By Its Quantity.

The Price Of Corn Will Naturally Rise With The Difficulty Of Producing The Last Portions Of It.

Whether A Bank Lent One Million, Ten Million, Or A Hundred Millions, They Would Not Permanently Alter The Market Rate Of Interest; They Would Alter Only The Value Of The Money They Issued.

If I Discover A Manure Which Will Enable Me To Make A Piece Of Land Produce 20 Per Cent More Corn, I May Withdraw At Least A Portion Of My Capital From The Most Unproductive Part Of My Farm.

If Then The Prosperity Of The Commercial Classes, Will Most Certainly Lead To Accumulation Of Capital, And The Encouragement Of Productive Industry; These Can By No Means Be So Surely Obtained As By A Fall In The Price Of Corn.

The Factors Left Out Of The Ricardian Equation Are Falling Wages And Idle Capacity.

Profits Are Not Made By Differential Cleverness, But By Differential Stupidity.

During The Period Of Capital Moving From One Employment To Another, The Profits On That To Which Capital Is Flowing Will Be Relatively High, But Will Continue So No Longer Than Till The Requisite Capital Is Obtained.

Gold And Silver Are No Doubt Subject To Fluctuations, From The Discovery Of New And More Abundant Mines; But Such Discoveries Are Rare, And Their Effects, Though Powerful, Are Limited To Periods Of Comparatively Short Duration.

Taxation Under Every Form Presents But A Choice Of Evils.

The Variation In The Value Of Money, However Great, Makes No Difference In The Rate Of Profits.

The Last Point For Consideration Is The Supposed Disposition Of The People To Interfere With The Rights Of Property. So Essential Does It Appear To Me, To The Cause Of Good Government, That The Rights Of Property Should Be Held Sacred, That I Would Agree To Deprive Those Of The Elective Franchise Against Whom It Could Justly Be Alleged That They Considered It Their Interest To Invade Them.

Nothing Contributes So Much To The Prosperity And Happiness Of A Country As High Profits.

...i Wish That I May Never Think The Smiles Of The Great And Powerful A Sufficient Inducement To Turn Aside From The Straight Path Of Honesty And The Convictions Of My Own Mind.

Adam Smith, And Other Able Writers To Whom I Have Alluded, Not Having Viewed Correctly The Principles Of Rent, Have, It Appears To Me, Overlooked Many Important Truths, Which Can Only Be Discovered After The Subject Of Rent Is Thoroughly Understood.

It Has Therefore Been Justly Observed That However Honestly The Coin Of A Country May Conform To Its Standard, Money Made Of Gold And Silver Is Still Liable To Fluctuations In Value, Not Only To Accidental, And Temporary, But To Permanent And Natural Variations, In The Same Manner As Other Commodities.

Whenever The Current Of Money Is Forcibly Stopped, And When Money Is Prevented From Settling At Its Just Level, There Are No Limits To The Possible Variations Of The Exchange.

It Appears To Me That One Great Cause Of Our Difference In Opinion On Subjects Which We Often Discuss Is That You Have Always In Mind The Immediate And Temporary Effects Of Particular Changes, Whereas I Put These Effects Quite Aside, And Fix My Whole Attention On The Long-term Effects That Will Result From Them.

It Is Not By The Absolute Quantity Of Produce Obtained By Either Class, That We Can Correctly Judge Of The Rate Of Profit, Rent, And Wages, But By The Quantity Of Labour Required To Obtain That Produce.

But A Rise In The Wages Of Labour Would Not Equally Affect Commodities Produced With Machinery Quickly Consumed, And Commodities Produced With Machinery Slowly Consumed.

Utility Then Is Not The Measure Of Exchangeable Value, Although It Is Absolutely Essential To It.

I Have Endeavoured To Show That The Ability To Pay Taxes Depends, Not On The Gross Money Value Of The Mass Of Commodities, Nor On The Net Money Value Of The Revenue Of Capitalists And Landlords, But On The Money Value Of Each Man's Revenue Compared To The Money Value Of The Commodities Which He Usually Consumes.

The Wheat Bought By A Farmer To Sow Is Comparatively A Fixed Capital To The Wheat Purchased By A Baker To Make Into Loaves.

If English Money Was Of The Same Value Then As Before, Hamburgh Money Must Have Risen In Value. But Where Is The Proof Of This?

Again Two Manufacturers May Employ The Same Amount Of Fixed, And The Same Amount Of Circulating Capital; But The Durability Of Their Fixed Capitals May Be Very Unequal.

After All The Fertile Land In The Immediate Neighbourhood Of The First Settlers Were Cultivated, If Capital And Population Increased, More Food Would Be Required, And It Could Only Be Procured From Land Not So Advantageously Situated.

But It Is Clear That The Price Of Labour Has No Necessary Connection With The Price Of Food, Since It Depends Entirely On The Supply Of Labourers Compared With The Demand.

Rent Is The Portion Of The Earth, Which Is Paid To The Landlord For The User Of The Original And Indestructible Powers Of The Soil

The Opinions That The Price Of Commodities Depends Solely On The Proportion Of Supply And Demand, Or Demand To Supply, Has Become Almost An Axiom In Political Economy, And Has Been The Source Of Much Error In That Science.

It Is Here We Come To The Heart Of The Matter. The Economic Principle Of Comparative Advantage', 'a Country May, In Return For Manufactured Commodities, Import Corn Even If It Can Be Grown With Less Labour Than In The Country From Which It Is Imported

Experience, However, Shows That Neither A State Nor A Bank Ever Have [sic] Had The Unrestricted Power Of Issuing Paper Money Without Abusing That Power; In All States, Therefore, The Issue Of Paper Money Ought To Be Under Some Check And Control; And None Seems So Proper For That Purpose As That Of Subjecting The Issuers Of Paper Money To The Obligation Of Paying Their Notes Either In Gold Coin Or Bullion.

Called An Inquiry Into The Laws Which Determine The Division Of The Produce.

The Produce Of The Earth - All That Is Derived From Its Surface By The United Application Of Labour, Machinery, And Capital, Is Divided Among Three Classes Of The Community, Namely, The Proprietor Of The Land, The Owner Of The Stock Or Capital Necessary For Its Cultivation, And The Labourers By Whose Industry It Is Cultivated.

If A Commodity Were In No Way Useful, - In Other Words, If It Could In No Way Contribute To Our Gratification, - It Would Be Destitute Of Exchangeable Value, However Scarce It Might Be, Or Whatever Quantity Of Labour Might Be Necessary To Procure It.

If A Tax On Malt Would Raise The Price Of Beer, A Tax On Bread Must Raise The Price Of Bread.

Like All Other Contracts, Wages Should Be Left To The Fair And Free Competition Of Themarket, And Should Never Be Controlled By The Interference Of The Legislature.

There Can Be No Greater Error Then In Supposing That Capital Is Increased By Non-consumption.

Money Is Neither A Material To Work Upon Nor A Tool To Work With.

If The Demand For Home Commodities Should Be Diminished, Because Of The Fall Of Rent On The Part Of The Landlords, It Will Be Increased In A Far Greater Degree By The Increased Opulence Of The Commercial Classes.

Every Transaction In Commerce Is An Independent Transaction.

In The Same Manner If Any Nation Wasted Part Of Its Wealth, Or Lost Part Of Its Trade, It Could Not Retain The Same Quantity Of Circulating Medium Which It Before Possessed.

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