HKB
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Often appears with: value, price, and exchange · money, coin, and credit · trade, markets, and merchants · taxation, tribute, and revenue · wages, profit, and rent · wages and profits · taxes on necessaries · taxation changes price relations · salmon and deer example · profit equality · premium on bills · paper money
Usually: argument (5) · detachment (4) · curiosity (1) · skepticism (1)
“To say that commodities are raised in price, is the same thing as to say that money is lowered in relative value; for it is by commodities that the relative value of gold is estimated.” David Ricardo, On The Principles of Political Economy, and Taxation · observation
“The clear and direct tendency of the poor laws, is in direct opposition to these obvious principles: it is not, as the legislature benevolently intended, to amend the condition of the poor, but to deteriorate the condition of both poor and rich;” David Ricardo, On The Principles of Political Economy, and Taxation · wit
Ricardo argues that changes in relative value come from the amount of labor needed for production, using examples where increased fish output lowers fish’s value relative to gold or game despite wage changes.
continue unaltered. Wages might rise twenty per cent., and profits consequently fall in a greater or less proportion, without occasioning the least alteration in the relative value of these commodities. Now suppose, that with the same labour and fixed capital, more fish could be produced, but no more gold or game, the relative value of fish would fall in comparison with gold or game. If, instead of twenty salmon, tw…
Ricardo argues that wage rises do not raise general commodity prices because the relative value of money adjusts through trade in gold (whether domestically produced or imported), and paper money must track gold.
of the argument, because it may be shewn, that whether it were found at home, or were imported from abroad, the effects ultimately and indeed immediately would be the same. When wages rise, it is generally because the increase of wealth and capital have occasioned a new demand for labour, which will infallibly be attended with an increased production of commodities. To circulate these additional commodities, even at…
Ricardo explains payments via bills of exchange can settle without money physically moving, but when trade becomes unprofitable the “premium” on bills forces money export until prices realign to stop imports/exports.
but they are known to him at the time; and the causes which may influence the market price of bills, or the rate of exchange, is no consideration of his. If the markets be favourable for the exportation of wine from Portugal to England, the exporter of the wine will be a seller of a bill, which will be purchased either by the importer of the cloth, or by the person who sold him his bill; and thus without the necessi…
Ricardo argues that when only some prices are affected by taxation and money’s value is stable, relative commodity prices change, altering profit equality across industries.
tax; in the first case it is only an eleventh of his income, in the second it is a tenth; money in the two cases being of a different value. But although, if money be not taxed, and do not alter in value, all commodities will rise in price, they will not rise in the same proportion; they will not after the tax bear the same relative value to each other which they did before the tax. In a former part of this work, we…
Ricardo contrasts artificial corn price changes from bounties with natural labour-value changes, arguing natural declines in corn’s value raise absolute profits, while bounties are offset by higher prices of other commodities.
by artificial means, it is always counteracted by a real rise in the value of some other commodity, so that if corn be bought cheaper, other commodities are bought dearer. This then is a further proof, that no particular disadvantage arises from taxes on necessaries, on account of their raising wages and lowering the rate of profits. Profits are indeed lowered, but only to the amount of the labourer's portion of the…