From the Bullion Controversy...
Malthus intervened in the Bullion Controversy with articles in the Edinburgh Review. In “Depreciation of paper currency”, which appeared anonymously in February 1811, he reviewed pamphlets on bullion, among them Ricardo’s High Price of Bullion and his Reply to Bosanquet.
Although praising Ricardo for his analysis of the depreciation of bank notes, he considers that “the great fault of Mr. Ricardo’s performance is the partial view which he takes of the causes which operate upon the course of Exchange” (Malthus 1811a [1963]: 74). He reproaches Ricardo for “considering redundancy and deficiency of currency as the mainspring of all commercial movements” (ibid.: 91), for attributing “a favourable or unfavourable exchange exclusively to a redundant or deficient currency” and for overlooking “the varying desires and wants of different societies, as an original cause of a temporary excess of imports above exports, or exports above imports” (ibid.: 75, author’s emphasis). This represents for Malthus a signal instance of one of the principal causes of error in political economy. In the fourth edition of the High Price of Bullion published in April 1811, Ricardo added an important appendix, mainly to answer the Edinburgh reviewers - he did not know yet that Malthus was the author. On 22 June 1811, Ricardo and Malthus met on the latter’s initiative having written a letter to Ricardo six days before: “As we are mainly on the same side of the question, we might supersede the necessity of a long controversy in print respecting the points in which we differ, by an amicable discussion in private” (Malthus in Ricardo 1951-73, VI: 21, author’s emphasis). The discussion must have been amicable indeed: from this meeting began a fascinating correspondence and a friendship, which lasted until Ricardo’s death in 1823. Malthus’s “Pamphlets on the bullion question” appeared in August 1811. A few days before finishing it, Malthus wrote to Ricardo: “It will have nothing to do with our controversy which appears to me to be too nice a question for the generality of readers to be interested about” (Malthus in Ricardo 1951-73, VI: 48). However, at the end of the article, Malthus, dealing with the problem concerning the return to cash payments, alludes to “the valuable suggestion of Mr. Ricardo” in his plan for bullion payments, outlined in his appendix to the fourth edition to the High Price of Bullion. He supported Ricardo’s view that the government should indulge the Bank of England’s directors and “merely compel them, at the expiration of two years, to pay their notes above £20, and no other, in guineas, standard bar gold, or foreign gold of the same value” (Malthus 1811b [1963]: 127).