Controversy with Malthus
In 1820 Thomas Robert Malthus published his Principles of Political Economy, which were designed as a response to Ricardo’s Principles. Ricardo replied with his Notes on Malthus, which he circulated privately; they were published only posthumously (see Works II).
Ricardo disagreed with Malthus essentially in the following regards. First, Malthus had argued that both “market” and “natural” prices are regulated by supply and demand. To this Ricardo objected that while market prices may deviate from natural prices, “this does not overturn the doctrine that the great regulator of price is cost of production” (Works II: 39). Also, in a letter to Malthus dated 9 October 1820, he wrote: “You say demand and supply regulates value - this, I think, is saying nothing” (Works VIII: 279). On 24 November he explained:I do not dispute either the influence of demand on the price of corn and on the price of all other things, but supply follows close at its heels, and soon takes the power of regulating price in its own hands, and in regulating it he is determined by cost of production. I acknowledge the intervals on which you so exclusively dwell, but still they are only intervals. (Works VIII: 302)
Without the elaboration of a theory of demand and supply, invoking the two terms does not explain anything.
Secondly, Malthus had questioned Ricardo’s view of the connection between capital accumulation and the rate of profits, but Ricardo found Malthus’s argument not convincing (see below). Third, Malthus had argued that too much saving will entail a “general glut” of commodities. However, since he had endorsed the view that every act of saving will be accompanied by an act of investment of equal size, Ricardo was at a loss to understand how Malthus could then contend that there might be a lack of aggregate effectual demand. Also, when Malthus suggested that the interests of the landlord and of the state coincide and that a class of spendthrifts or “unproductive consumers” - the landlords - was needed in order to stabilize demand, Ricardo commented drily: “A body of unproductive labourers are just as necessary and as useful with a view to future production, as a fire, which should consume in the manufacturers warehouse the goods which those unproductive labourers would otherwise consume” (Works II: 421).
In 1822 Ricardo, his wife and his two youngest daughters embarked on a tour to several countries on the Continent that lasted for a couple of months during which Ricardo met a handful of economists, including the Swiss Jean-Charles Leonard Simonde de Sismondi and the Frenchman Jean-Baptiste Say.
His opinion on the two economists’ views did not improve upon their encounter.When back in England, Ricardo continued his discussions and correspondence with Malthus, Mill, McCulloch, Robert Torrens and others. He made a further attempt to solve the still unsettled problem of value and distribution during the last few weeks of his life and composed a complete rough draft and an unfinished later version entitled “Absolute Value and Exchangeable Value” (see Works IV: 357-411). In them he elaborated on his own view of what would be an ideal measure of value and criticized the views entertained by other authors. However, it is clear that the search for such a measure was essentially a search for a coherent theory of value and distribution, as Sraffa remarked perceptively.
Ricardo died unexpectedly at his country seat on 11 September 1823 at the age of 51 from an “infection of the ear, which ultimately extended itself to the internal part of the head” (Works X: 12).
On the life, times and works of Ricardo, see also Weatherall (1976), De Vivo (1987), Henderson and Davis (1997), King (2013) and Heertje in Kurz and Salvadori (2015).