Transcriber's note:
Corrections in the ERRATA section have been made and duplicate Chapter numbers are marked by asterisks as in the original text.

ON

THE PRINCIPLES

OF

POLITICAL ECONOMY,

AND

TAXATION.

By DAVID RICARDO, Esq.

LONDON:

JOHN MURRAY, ALBEMARLE-STREET

1817.

J. McCreery. Printer,
Black Horse Court, London.

PREFACE.

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.

But in different stages of society, the proportions of the whole produce of the earth which will be allotted to each of these classes, under the names of rent, profit, and wages, will be essentially different; depending mainly on the actual fertility of the soil, on the accumulation of capital and population, and on the skill, ingenuity, and instruments employed in agriculture.

To determine the laws which regulate this distribution, is the principal problem in Political Economy: much as the science has been improved by the writings of Turgot, Stuart, Smith, Say, Sismondi, and others, they afford very little satisfactory information respecting the natural course of rent, profit, and wages.

In 1815, Mr. Malthus in his "Inquiry into the Nature and Progress of Rent," and a Fellow of University College, Oxford, in his "Essay on the Application of Capital to Land," presented to the world, nearly at the same moment, the true doctrine of rent; without a knowledge of which it is impossible to understand the effect of the progress of wealth on profits and wages, or to trace satisfactorily the influence of taxation on different classes of the community, particularly when the commodities taxed are the productions immediately derived from the surface of the earth. Adam Smith, and the 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.

To supply this deficiency, abilities are required of a far superior cast to any possessed by the writer of the following pages; yet after having given to this subject his best consideration—after the aid which he has derived from the works of the above-mentioned eminent writers—and after the valuable experience which a few late years, abounding in facts, have yielded to the present generation—it will not, he trusts, be deemed presumptuous in him to state his opinions on the laws of profits and wages, and on the operation of taxes. If the principles which he deems correct should be found to be so, it will be for others more able than himself to trace them to all their important consequences.

The writer, in combating received opinions, has found it necessary to advert more particularly to those passages in the writings of Adam Smith from which he sees reason to differ; but he hopes it will not on that account be suspected that he does not, in common with all those who acknowledge the importance of the science of Political Economy, participate in the admiration which the profound work of this celebrated author so justly excites.

The same remark may be applied to the excellent works of M. Say, who not only was the first, or among the first, of continental writers, who justly appreciated and applied the principles of Smith, and who has done more than all other continental writers taken together, to recommend the principles of that enlightened and beneficial system to the nations of Europe; but who has succeeded in placing the science in a more logical, and more instructive order; and has enriched it by several discussions, original, accurate, and profound.1 The respect, however, which the author entertains for the writings of this gentleman, has not prevented him from commenting with that freedom which he thinks the interests of science require, on such passages of the "Economie Politique," as appeared at variance with his own ideas.

CONTENTS.

CHAP.

Page

I.
On Value
1

II.
On Rent
49

III.
On the Rent of Mines
77

IV.
On Natural and Market Price
82

V.
On Wages
90

V*.
On Profits
116

VI.
On Foreign Trade
146

VII.
On Taxes
186

VIII.
Taxes on Raw Produce
194

VIII*.
Taxes on Rent
221

IX.
Tithes
225

X.
Land-Tax
232

XI.
Taxes on Gold
247

XII.
Taxes on Houses
262

XIII.
Taxes on Profits
269

XIV.
Taxes on Wages
285

XV.
Taxes on other Commodities than Raw Produce
330

XVI.
Poor Rates
354

XVII.
On Sudden Changes in the Channels of Trade
363

XVIII.
Value and Riches, their Distinctive Properties
377

XIX.
Effects of Accumulation on Profits and Interest
398

XX.
Bounties on Exportation, and Prohibitions of Importation
417

XXI.
On Bounties on Production
449

XXII.
Doctrine of Adam Smith concerning the Rent of Land
458

XXIII.
On Colonial Trade
476

XXIV.
On Gross and Net Revenue
491

XXV.
On Currency and Banks
499

XXVI.
On the comparative Value of Gold, Corn, and Labour, in Rich and in Poor Countries
527

XXVII.
Taxes paid by the Producer
538

XXVIII.
On the Influence of Demand and Supply on Prices
542

XXIX.
Mr. Malthus's Opinions on Rent
549

CHAPTER I.

ON VALUE.

It has been observed by Adam Smith, that "the word Value has two different meanings, and sometimes expresses the utility of some particular object, and sometimes the power of purchasing other goods which the possession of that object conveys. The one may be called value in use; the other, value in exchange. The things," he continues, "which have the greatest value in use, have frequently little or no value in exchange; and, on the contrary, those which have the greatest value in exchange, have little or no value in use." Water and air are abundantly useful; they are indeed indispensable to existence, yet, under ordinary circumstances, nothing can be obtained in exchange for them. Gold, on the contrary, though of little use compared with air or water, will exchange for a great quantity of other goods.

Lesen Sie weiter in der vollständigen Ausgabe!

Lesen Sie weiter in der vollständigen Ausgabe!

Lesen Sie weiter in der vollständigen Ausgabe!

Lesen Sie weiter in der vollständigen Ausgabe!

Lesen Sie weiter in der vollständigen Ausgabe!

Lesen Sie weiter in der vollständigen Ausgabe!

Lesen Sie weiter in der vollständigen Ausgabe!

Lesen Sie weiter in der vollständigen Ausgabe!

Lesen Sie weiter in der vollständigen Ausgabe!

Lesen Sie weiter in der vollständigen Ausgabe!

Lesen Sie weiter in der vollständigen Ausgabe!