On the Principles ofPolitical Economy and Taxation 《政治经济学及赋税原理》

OnThePrinciplesofPoliticalEconomyandTaxation

byDavidRicardo,1817

PREFACE

Theproduceoftheearth-allthatisderivedfromitssurfacebythe

unitedapplicationoflabour,machinery,andcapital,isdividedamong

threeclassesofthecommunity;namely,theproprietoroftheland,the

ownerofthestockorcapitalnecessaryforitscultivation,andthe

labourersbywhoseindustryitiscultivated.

Butindifferentstagesofsociety,theproportionsofthewholeproduce

oftheearthwhichwillbeallottedtoeachoftheseclasses,underthe

namesofrent,profit,andwages,willbeessentiallydifferent;depending

mainlyontheactualfertilityofthesoil,ontheaccumulationofcapital

andpopulation,andontheskill,ingenuityandinstrumentsemployed

inagriculture.

Todeterminethelawswhichregulatethisdistribution,isthe

principalprobleminPoliticalEconomy:muchasthesciencehasbeen

improvedbythewritingsofTurgot,Stuart,Smith,SayzSismondi,and

others,theyaffordverylittlesatisfactoryinformationrespectingthe

naturalcourseofrentzprofit,andwages.

In1815,MrMalthus,inhis*InquiryintotheNatureandProgressof

Rent,*andaFellowofUniversityCollege,Oxford1.inhis*Essayonthe

ApplicationofCapitaltoLand,'presentedtotheworld,nearlyatthe

samemomentfthetruedoctrineofrent;withoutaknowledgeofwhich,

itisimpossibletounderstandtheeffectoftheprogressofwealthon

profitsandwages,ortotracesatisfactorilytheinfluenceoftaxationon

differentclassesofthecommunity;particularlywhenthecommodities

taxedaretheproductionsimmediatelyderivedfromthesurfaceofthe

earth.AdamSmith,andtheotherablewriterstowhomIhavealluded,

nothavingviewedcorrectlytheprinciplesofrent,have,itappearsto

me,overlookedmanyimportanttruths,whichcanonlybediscovered

afterthesubjectofrentisthoroughlyunderstood.

Tosupplythisdeficiency,abilitiesarerequiredofafarsuperiorcast

toanypossessedbythewriterofthefollowingpages;yet,afterhaving

giventothissubjecthisbestconsideration-aftertheaidwhichhehas

derivedfromtheworksoftheabove-mentionedeminentwriters-and

afterthevaluableexperiencewhichafewlateyears,aboundinginfacts,

haveyieldedtothepresentgeneration-itwillnot,hetrusts,bedeemed

presumptuousinhimtostatehisopinionsonthelawsofprofitsand

wages,andontheoperationoftaxes.Iftheprincipleswhichhedeems

correct,shouldbefoundtobeso,itwillbeforothers,moreablethan

himselfztotracethemtoalltheirimportantconsequences.

Thewriter,incombatingreceivedopinions,hasfounditnecessaryto

advertmoreparticularlytothosepassagesinthewritingsofAdam

Smithfromwhichheseesreasontodiffer;buthehopesitwillnot,on

thataccountrbesuspectedthathedoesnot,incommonwithallthose

whoacknowledgetheimportanceofthescienceofPoliticalEconomy,

participateintheadmirationwhichtheprofoundworkofthis

celebratedauthorso.justlyexcites.

ThesameremarkmaybeappliedtotheexcellentworksofM.Say,

whonotonlywasthefirst,oramongthefirst,ofcontinentalwriters,

whojustlyappreciatedandappliedtheprinciplesofSmith,andwhohas

donemorethanallothercontinentalwriterstakentogether,to

recommendtheprinciplesofthatenlightenedandbeneficialsystemto

thenationsofEurope;butwhohassucceededinplacingthescienceina

morelogical,andmoreinstructiveorder;andhasenricheditbyseveral

discussions,original,accurate,andprofound.(1*)Therespect,however,

whichtheauthorentertainsforthewritingsofthisgentleman,hasnot

preventedhimfromcommentingwiththatfreedomwhichhethinksthe

interestsofsciencerequire,onsuchpassagesofthe1Economie

Politique,1asappearedatvariancewithhisownideas.

AdvertisementtotheThirdEdition

InthisEditionIhaveendeavouredtoexplainmorefullythaninthelast,

myopiniononthedifficultsubjectofVALUE,andforthatpurpose

havemadeafewadditionstothefirstchapter.Ihavealsoinsertedanew

chapteronthesubjectofMACHINERY,andontheeffectsofits

improvementontheinterestsofthedifferentclassesoftheState.Inthe

chapterontheDISTINCTIVEPROPERTIESOFVALUEAND

RICHES,IhaveexaminedthedoctrinesofM.Sayonthatimportant

question,asamendedinthefourthandlasteditionofhiswork.Ihavein

thelastchapterendeavouredtoplaceinastrongerpointofviewthan

before,thedoctrineoftheabilityofacountrytopayadditionalmoney

taxeszalthoughtheaggregatemoneyvalueofthemassofits

commoditiesshouldfallzinconsequenceeitherofthediminished

quantityoflabourrequiredtoproduceitscornathomezby

improvementsinitshusbandry,orfromitsobtainingapartofitscorn

atacheaperpricefromabroad,bymeansoftheexportationofits

manufacturedcommodities.Thisconsiderationisofgreatimportance,

asitregardsthequestionofthepolicyofleavingunrestrictedthe

importationofforeigncorn,particularlyinacountryburthenedwitha

heavyfixedmoneytaxation,theconsequenceofanimmenseNational

Debt.Ihaveendeavouredtoshew,thattheabilitytopaytaxes,depends,

notonthegrossmoneyvalueofthemassofcommodities,noronthenet

moneyvalueoftherevenuesofcapitalistsandlandlords,butonthe

moneyvalueofeachman'srevenue,comparedtothemoneyvalueofthe

commoditieswhichheusuallyconsumes.

March26,1821.

Chapter1

OnValue

Thevalueofacommodity,orthequantityofanyothercommodityfor

whichitwillexchange,dependsontherelativequantityoflabour

whichisnecessaryforitsproduction,andnotonthegreaterorless

compensationwhichispaidforthatlabour.

IthasbeenobservedbyAdamSmith,that'thewordValuehastwo

differentmeaningszandsometimesexpressestheutilityofsome

particularobjectrandsometimesthepowerofpurchasingothergoods

whichthepossessionofthatobjectconveys.Theonemaybecalled

valueinuse;theothervalueinexchange.Thethings,'hecontinues,

1whichhavethegreatestvalueinuse,havefrequentlylittleornovalue

inexchange;and,onthecontrary,thosewhichhavethegreatestvaluein

exchange,havelittleornovalueinuse;Waterandairareabundantly

useful;theyareindeedindispensabletoexistence,yet,underordinary

circumstances,nothingcanbeobtainedinexchangeforthem.Gold,on

thecontrary,thoughoflittleusecomparedwithairorwater,will

exchangeforagreatquantityofothergoods.

Utilitythenisnotthemeasureofexchangeablevalue,althoughitis

absolutelyessentialtoit.Ifacommoditywereinnowayuseful,-in

otherwords,ifitcouldinnowaycontributetoourgratification,-it

wouldbedestituteofexchangeablevalue,howeverscarceitmightbe,or

whateverquantityoflabourmightbenecessarytoprocureit.

Possessingutility,commoditiesderivetheirexchangeablevaluefrom

twosources：fromtheirscarcity,andfromthequantityoflabour

requiredtoobtainthem.

Therearesomecommodities,thevalueofwhichisdeterminedby

theirscarcityalone.Nolabourcanincreasethequantityofsuchgoods,

andthereforetheirvaluecannotbeloweredbyanincreasedsupply.

Somerarestatuesandpictures,scarcebooksandcoins,winesofa

peculiarquality,whichcanbemadeonlyfromgrapesgrownona

particularsoil,ofwhichthereisaverylimitedquantity,areallofthis

description.Theirvalueiswhollyindependentofthequantityoflabour

originallynecessarytoproducethem,andvarieswiththevarying

wealthandinclinationsofthosewhoaredesiroustopossessthem.

Thesecommoditiesfhowever,formaverysmallpartofthemassof

commoditiesdailyexchangedinthemarket.Byfarthegreatestpartof

thosegoodswhicharetheobjectsofdesire,areprocuredbylabour,.and

theymaybemultiplied,notinonecountryalone,butinmany,almost

withoutanyassignablelimit,ifwearedisposedtobestowthelabour

necessarytoobtainthem.

Inspeakingthenofcommodities,oftheirexchangeablevalue,andof

thelawswhichregulatetheirrelativeprices,wemeanalwayssuch

commoditiesonlyascanbeincreasedinquantitybytheexertionof

humanindustry,andontheproductionofwhichcompetitionoperates

withoutrestraint.

Intheearlystagesofsociety,theexchangeablevalueofthese

commoditieszortherulewhichdetermineshowmuchofoneshallbe

giveninexchangeforanother,dependsalmostexclusivelyonthe

comparativequantityoflabourexpendedoneach.

,Therealpriceofeverything,*saysAdamSmith,*whateverything

reallycoststothemanwhowantstoacquireit,isthetoilandtroubleof

acquiringit.Whateverythingisreallyworthtoit,orthemanwhohas

acquiredit,andwhowantstodisposeofit,orexchangeitforsomething

else,isthetoilandtroublewhichitcansavetohimself,andwhichit

canimposeuponotherpeople.**Labourwasthefirstprice-theoriginal

purchase-moneythatwaspaidforallthings.*Again,,inthatearlyand

rudestateofsociety,whichprecedesboththeaccumulationofstockand

theappropriationofland,theproportionbetweenthequantitiesof

labournecessaryforacquiringdifferentobjectsseemstobetheonly

circumstancewhichcanaffordanyruleforexchangingthemforone

another.Ifamonganationofhunters,forexample,itusuallycosttwice

thelabourtokillabeaverwhichitdoestokilladeer,onebeavershould

naturallyexchangefor,orbeworthtwodeer.Itisnaturalthatwhatis

usuallytheproduceoftwodays’,ortwohours1labour,shouldbeworth

doubleofwhatisusuallytheproduceofoneday's,oronehour's

labour.'(2*)

Thatthisisreallythefoundationoftheexchangeablevalueofall

things,exceptingthosewhichcannotbeincreasedbyhumanindustry,

isadoctrineoftheutmostimportanceinpoliticaleconomy;forfromno

sourcedosomanyerrors,andsomuchdifferenceofopinioninthat

scienceproceed,asfromthevagueideaswhichareattachedtotheword

value.

Ifthequantityoflabourrealizedincommodities,regulatetheir

exchangeablevaluezeveryincreaseofthequantityoflabourmust

augmentthevalueofthatcommodityonwhichitisexercised,asevery

diminutionmustlowerit.

AdamSmith,whosoaccuratelydefinedtheoriginalsourceof

exchangeablevalue,andwhowasboundinconsistencytomaintain,

thatallthingsbecamemoreorlessvaluableinproportionasmoreor

lesslabourwasbestowedontheirproduction,hashimselferected

anotherstandardmeasureofvalue,andspeaksofthingsbeingmoreor

lessvaluable,inproportionastheywillexchangeformoreorlessofthis

standardmeasure.Sometimeshespeaksofcorn,atothertimesoflabour,

asastandardmeasure；notthequantityoflabourbestowedonthe

productionofanyobject,butthequantitywhichitcancommandinthe

market:asiftheseweretwoequivalentexpressions,andasifbecausea

man'slabourhadbecomedoublyefficient,andhecouldtherefore

producetwicethequantityofacommodity,hewouldnecessarily

receivetwicetheformerquantityinexchangeforit.

Ifthisindeedweretrue,iftherewardofthelabourerwerealwaysin

proportiontowhatheproduced,thequantityoflabourbestowedona

commodity,andthequantityoflabourwhichthatcommoditywould

purchase,wouldbeequal,andeithermightaccuratelymeasurethe

variationsofotherthings:buttheyarenotequal;thefirstisundermany

circumstancesaninvariablestandard,indicatingcorrectlythe

variationsofotherthings;thelatterissubjecttoasmanyfluctuationsas

thecommoditiescomparedwithit.AdamSmith,aftermostably

showingtheinsufficiencyofavariablemedium,suchasgoldand

silver,forthepurposeofdeterminingthevaryingvalueofotherthings,

hashimselfzbyfixingoncornorlabourzchosenamediumnoless

variable.

Goldandsilverarenodoubtsubjecttofluctuationszfromthe

discoveryofnewandmoreabundantmines；butsuchdiscoveriesare

rare,andtheireffectszthoughpowerful,arelimitedtoperiodsof

comparativelyshortduration.Theyaresubjectalsotofluctuation,from

improvementsintheskillandmachinerywithwhichtheminesmaybe

worked；asinconsequenceofsuchimprovements,agreaterquantity

maybeobtainedwiththesamelabour.Theyarefurthersubjectto

fluctuationfromthedecreasingproduceofthemines,aftertheyhave

yieldedasupplytotheworld,forasuccessionofages.Butfromwhich

ofthesesourcesoffluctuationiscornexempted?Doesnotthatalsovary,

ononehand；fromimprovementsinagriculture,fromimproved

machineryandimplementsusedinhusbandry,aswellasfromthe

discoveryofnewtractsoffertileland,whichinothercountriesmaybe

takenintocultivation,andwhichwillaffectthevalueofcorninevery

marketwhereimportationisfree?Isitnotontheotherhandsubjectto

beenhancedinvaluefromprohibitionsofimportation,fromincreasing

populationandwealth,andthegreaterdifficultyofobtainingthe

increasedsupplies#onaccountoftheadditionalquantityoflabour

whichthecultivationofinferiorlandsrequires?Isnotthevalueof

labourequallyvariable;beingnotonlyaffected,asallotherthingsare,

bytheproportionbetweenthesupplyanddemand,whichuniformly

varieswitheverychangeintheconditionofthecommunity,butalsoby

thevaryingpriceoffoodandothernecessaries,onwhichthewagesof

labourareexpended?

Inthesamecountrydoublethequantityoflabourmayberequiredto

produceagivenquantityoffoodandnecessariesatonetime,thatmay

benecessaryatanother,andadistanttime;yetthelabourer1sreward

maypossiblybeverylittlediminished.Ifthelabourer1swagesatthe

formerperiod,wereacertainquantityoffoodandnecessaries,he

probablycouldnothavesubsistedifthatquantityhadbeenreduced.

Foodandnecessariesinthiscasewillhaverisen100percentif

estimatedbythequantityoflabournecessarytotheirproduction,while

theywillscarcelyhaveincreasedinvalue,ifmeasuredbythequantity

oflabourforwhichtheywillexchange.

Thesameremarkmaybemaderespectingtwoormorecountries.In

AmericaandPoland,onthelandlasttakenintocultivation,ayear's

labourofanygivennumberofmen,willproducemuchmorecornthan

onlandsimilarlycircumstancedinEngland.Now,supposingallother

necessariestobeequallycheapinthosethreecountries,woulditnotbea

greatmistaketoconclude,thatthequantityofcornawardedtothe

labourer,wouldineachcountrybeinproportiontothefacilityof

production?

Iftheshoesandclothingofthelabourer,could,byimprovementsin

machinery,beproducedbyonefourthofthelabournownecessaryto

theirproduction,theywouldprobablyfall75percent;butsofarisit

frombeingtrue,thatthelabourerwouldtherebybeenabled

permanentlytoconsumefourcoats,orfourpairofshoes,insteadofone,

thatitisprobablehiswageswouldinnolongtimebeadjustedbythe

effectsofcompetition,andthestimulustopopulation,tothenewvalue

ofthenecessariesonwhichtheywereexpended.Iftheseimprovements

extendedtoalltheobjectsofthelabourer*sconsumption,weshouldfind

himprobablyattheendofaveryfewyears,inpossessionofonlya

small,ifany,additiontohisenjoymentszalthoughtheexchangeable

valueofthosecommodities,comparedwithanyothercommodity,inthe

manufactureofwhichnosuchimprovementweremade,hadsustaineda

veryconsiderablereduction;andthoughtheyweretheproduceofavery

considerablydiminishedquantityoflabour.

Itcannotthenbecorrect,tosaywithAdamSmith,'thataslabourmay

sometimespurchaseagreaterzandsometimesasmallerquantityof

goods,itistheirvaluewhichvaries,notthatofthelabourwhich

purchasesthem;*andtherefore,'thatlabouralonenevervaryinginits

ownvalue,isalonetheultimateandrealstandardbywhichthevalueof

allcommoditiescanatalltimesandplacesbeestimatedandcompared;*

-butitiscorrecttosay,asAdamSmithhadpreviouslysaid,*thatthe

proportionbetweenthequantitiesoflabournecessaryforacquiring

differentobjectsseemstobetheonlycircumstancewhichcanafford

anyruleforexchangingthemforoneanother;orinotherwords,thatit

isthecomparativequantityofcommoditieswhichlabourwillproduce,

thatdeterminestheirpresentorpastrelativevalue,andnotthe

comparativequantitiesofcommodities,whicharegiventothelabourer

inexchangeforhislabour.

Twocommoditiesvaryinrelativevaluezandwewishtoknowin

whichthevariationhasreallytakenplace.Ifwecomparethepresent

valueofone,withshoes,stockings,hats,iron,sugar,andallother

commoditieszwefindthatitwillexchangeforpreciselythesame

quantityofallthesethingsasbefore.Ifwecomparetheotherwiththe

samecommodities,wefindithasvariedwithrespecttothemall:we

maythenwithgreatprobabilityinferthatthevariationhasbeeninthis

commodity,andnotinthecommoditieswithwhichwehavecompared

it.Ifonexaminingstillmoreparticularlyintoallthecircumstances

connectedwiththeproductionofthesevariouscommodities,wefind

thatpreciselythesamequantityoflabourandcapitalarenecessaryto

theproductionoftheshoes,stockings,hats,iron,sugar,&c,;butthatthe

samequantityasbeforeisnotnecessarytoproducethesingle

commoditywhoserelativevalueisaltered,probabilityischangedinto

certainty,andwearesurethatthevariationisinthesinglecommodity.

wethendiscoveralsothecauseofitsvariation.

IfIfoundthatanounceofgoldwouldexchangeforalessquantityof

allthecommoditiesaboveenumerated,andmanyothers；andif,

moreover,Ifoundthatbythediscoveryofanewandmorefertilemine,

orbytheemploymentofmachinerytogreatadvantage,agiven

quantityofgoldcouldbeobtainedwithalessquantityoflabour,I

shouldbejustifiedinsayingthatthecauseofthealterationinthevalue

ofgoldrelativelytoothercommodities,wasthegreaterfacilityofits

production,orthesmallerquantityoflabournecessarytoobtainit.In

likemanner,iflabourfellveryconsiderablyinvalue,relativelytoall

otherthings,andifIfoundthatitsfallwasinconsequenceofan

abundantsupply,encouragedbythegreatfacilitywithwhichcorn,and

theothernecessariesofthelabourer,wereproduced,itwould,I

apprehend,becorrectformetosaythatcornandnecessarieshadfallen

invalueinconsequenceoflessquantityoflabourbeingnecessaryto

producethem,andthatthisfacilityofprovidingforthesupportofthe

labourerhadbeenfollowedbyafallinthevalueoflabour.N。，say

AdamSmithandMrMalthus,inthecaseofthegoldyouwerecorrectin

callingitsvariationafallofitsvalue,becausecornandlabourhadnot

thenvaried;andasgoldwouldcommandalessquantityofthem,aswell

asofallotherthings,thanbefore,itwascorrecttosaythatallthings

hadremainedstationary,andthatgoldonlyhadvaried;butwhencorn

andlabourfall,thingswhichwehaveselectedtobeourstandard

measureofvalue,notwithstandingallthevariationstowhichwe

acknowledgetheyaresubject,itwouldbehighlyimpropertosayso;the

correctlanguagewillbetosay,thatcornandlabourhaveremained

stationary,andallotherthingshaveriseninvalue.

NowitisagainstthislanguagethatIprotest.Ifindthatprecisely,as

inthecase