1823 Everett (A. H.), New Ideas on Population. Increase in population brings its own remedy in increased productivity through division of labor and increased skill.

1830: Sadler (Michael T.), The Law of Population; a Treatise in Six Books; in disproof of the superfecundity of human beings, and developing the real principle of their increase. Attempts a refutation of Malthus by statistics. Theological premises. His "law" was that prolificness varies inversely with numbers, the controlling force being space, modified by the character of the land. 1831 Senior (Wm. N.), Two Lectures on Population (Oxford). Senior upholds Malthus. He emphasizes security, freedom of internal and external trade, equal social and industrial opportunity, and education. "These are propositions which Mr. Malthus has established by facts and reasonings, which, opposed as they were to long-rooted prejudices, and assailed by every species of sophistry and clamour, are now so generally admitted, that they have become rather matters of allusion than of formal statement (p. 50). Senior appends letters from Malthus explaining that by "tendency" he does not necessarily mean an actuality. 1832: Anonymous, An Enquiry into the Principles of Population, exhibiting a system of regulations for the Poor, designed immediately to lessen and finally to remove the evils which have hitherto pressed upon the Labouring classes in Society. Better adjustment of labor needed. Possibilities of chemistry in producing subsistence noted. 1832: Owen (Robt.), Moral Physiology, A Brief and plain Treatise on the Population Question. "Neo-Malthusian" artificial re

striction of size of families.

1833: Lloyd (W. F.), Two lectures on the checks to populations.

""

For Carey's criticism see below, page 245. For those of Sismondi and Messedaglia, see pages 309, 487 f. The discussion was also carried on in other countries. Most of the criticism of Malthus was either beside the point, because his critics did not understand his principle with its several limitations and qualifications, or was vitiated by irrational theological premises.

CHAPTER XII

RICARDO AND THE THEORY OF DISTRIBUTION,

ESPECIALLY THE RENT DOCTRINE

Life and Circumstances; Chief Writings. - David Ricardo · was born in 1772, in England. His father, a Hebrew immigrant from Holland, was then a member of the London Stock Exchange. His ancestors were Portuguese Jews, a remarkable branch of a remarkable race. Spinoza, the philosopher, and Isaac Pinto, a publicist, came from the same stock. The boy received some commercial education, and at fourteen began his acquaintance with the Exchange.

Becoming involved in religious difficulties, he finally embraced Christianity, and was cast off by his father. At twentyone he began business on his own account, became a member of the Stock Exchange, and at twenty-five had already acquired a fortune. Coolness, good judgment, surprising quickness at figures and calculation, and a great capacity for work were factors in his success.

Having acquired a competence, Ricardo began to interesthimself in science. He first took up mathematics, chemistry, and geology; but, in 1799, his attention having been drawn to economic studies by a perusal of the Wealth of Nations, he came to devote himself chiefly to political economy.

His first publication was a tract entitled The High Price of · Bullion a Proof of the Depreciation of Bank Notes. Appearing early in 1810, it passed through four editions in two years, and its

1 On Ricardo and his work, cf. American Economic Association Papers, 1911 (Proceedings of Annual Meeting, St. Louis, 1910); Diehl, David Ricardo's Grundsätze der Volkswirthschaft und Besteurung (Leipzig, 1905), and the following footnote references

N

1823 mz

principles were adopted in the Report of the Bullion Committee. When Mr. Bosanquet, a prominent merchant, criticized these principles, Ricardo was induced, in 1811, to write a Reply to Mr. Bosanquet's Practical Observations on the Report of the Bullion Committee. This reply is called by M'Culloch "one of the best essays that have appeared on any disputed question of political economy." It was followed by two tracts or essays: Essay on the Influence of a Low Price of Corn on the Profits of Stock (1815), and Proposals for an Economical and Secure Currency (1816).

In 1817 he published his chief work, On the Principles of Political Economy and Taxation. Although it made a real epoch in economic thought, it was only with great reluctance and after considerable persuasion on the part of his friends that he consented to bring it before the public. He had already acquired some reputation, and it has been said that he feared this work would not sustain it. If this was the case, he was most happily disappointed. A second edition appeared in 1819, and a third in 1821.

His other important economic publications were "The Funding System," an article contributed to the Encyclopædia Britannica in 1820, and a pamphlet on Protection to Agriculture. It appeared in 1822, and is called by M'Culloch, who was, of course, a warm admirer, "the best of all his pamphlets and indeed a chef-d'œuvre.' M'Culloch adds, " Had Mr. Ricardo never written anything else, this pamphlet would have placed him in the first rank of political economists."

A manuscript describing a Plan for the Establishment of a National Bank was published after Ricardo's death, which occurred in 1823.

Ricardo was for some time a member of the House of Commons, to which he was elected in 1819, to represent Portarlington. He was an independent in politics, but was generally found on the side of progress and reform. He did not, however, take as active a part in Parliament as might have been expected. He never spoke upon any subject to which he had not given long and careful study, and was regarded as an authority by many,

his opinions being highly valued. Lord Brougham describes him as a persuasive speaker on account of the apparent sincerity and purity of his motives and by reason of the clearness and force of his arguments.

In his private relations, he was kind and charitable, and made a generous use of his wealth. Besides responding largely to appeals made in behalf of other institutions, he supported entirely out of his own pocket two schools and an almshouse.

Some of the differences between the industrial environment of Adam Smith and that of his followers have been touched upon in the chapter on Malthus. There the growth of population and attendant poverty were noted. In connection with Ricardo and his time, it is particularly noteworthy that there had come a completer working out of the results of the Industrial Revolution, and a rise in grain prices, accompanied by a resort to poorer soils and higher rents. The first factor meant a more capitalistic industry. Old restrictions and regulations became obsolete and began to be repealed, and for a time competition was given nearly full sway. Old labor laws were repealed, and the trade-union problem grew apace. The rise of new industries, the expansion of trade, the Napoleonic wars, begot change and mobility which were notable in contrast with the past. At the same time, rising prices for food brought on corn law discussions, and the manufacturing classes, desiring cheap food for cheap labor, were arrayed against the landowners.

In such an atmosphere, the question of the distribution of wealth could hardly sleep. What was the cause and what the remedy for high food prices and rents? How should wages be determined, and what would be the effect of labor organization? Upon what class should taxes rest? How would all these questions affect the profits of the capitalist class? Such were the problems of the day. The economist can see now that the time was pregnant with a theory of distribution, which, assuming competition, would center round the margin of land cultivation. In the hands of a thinker like Ricardo, a Jew and a man of the Stock Exchange, such a theory would be given an abstract and absolute setting.

The Principles of Political Economy. - Value. In the first line of his first chapter, Ricardo quotes Adam Smith, and proceeds to follow him in distinguishing value in use from value in exchange. The latter is the value treated in political economy. Utility is not the measure (determinant) of exchangeable" value, though it is "absolutely essential to it." Natural value is distinguished from that of the market, being not temporary and fluctuating, as the latter, but that which would exist if there were no disturbance. It is always of this "natural" or normal value that Ricardo speaks. Thus far, then, Ricardo follows Smith.

Assuming their utility,' he next divides commodities which have an exchange value into two classes: those which derive it from scarcity, and those which derive it from the quantity of labor required to obtain them. A picture by Raphael would belong to the first class. Its value would be altogether irrespective of the labor it had cost, and would depend only on what people could or would give. The class is, however, so limited in extent that Ricardo leaves it out of consideration, and devotes his attention to commodities of the second class: those which are "procured by labour" and which may be multiplied according to desire "without any assignable limit."

Adam Smith had explained that in the early stages of society preceding the appropriation of land and accumulation of capital, the relative values of such things depended upon the quantities of labor expended in procuring them. In this Ricardo agrees with Smith, but differs in maintaining that even after land has been appropriated and capital applied to industry,2 relative values depend upon the quantities of labor required, the same as before. In our present social organization, Smith thought that other elements than labor affect the comparative value of commodities; he found it influenced by wages, profits, and rent.

1 Ricardo said utility is "absolutely essential," but saw in it no means of measuring or determining values. To him, an analysis of sellers' costs was most important. He had no distinct concept of marginal utility.

2 Indeed, Ricardo taught that capital of some sort had coöperated with labor from earliest times.