On the Principles of Political Economy and Taxation — David Ricardo
You may copy it, give it away or re-use it under the terms of the Project Gutenberg License included with this eBook or online at www.gutenberg.org . If you are not located in the United States, you will have to check the laws of the country where you are located before using this eBook. Title : On The Principles of Political Economy, and Taxation Author : David Ricardo Release date : July 31, 2010 [eBook #33310] Most recently updated: January 6, 2021 Language : English Other information and formats : www.gutenberg.org/ebooks/33310 Credits : Produced by Fritz Ohrenschall, Turgut Dincer and the Online Distributed Proofreading Team at https://www.pgdp.net (This file was produced from images generously made available by the Posner Memorial Collection (http://posner.library.cmu.edu/Posner/)) *** START OF ON THE PRINCIPLES OF POLITICAL ECONOMY, AND TAXATION. By DAVID RICARDO, Esq. LONDON: JOHN MURRAY, ALBEMARLE-STREET 1817. J. M c Creery. Printer, Black Horse Court, London. PREFACE. T he 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. I t has been observed by Adam Smith, that "the word Value has two