On The Principles of Political Economy, and Taxation

by David Ricardo

• ACCUMULATION of capital, effects of, on the relative value of commodities, [16]-42.
  • And on profits and interest, [398]-416.
• Agriculture, effects of improvements in, on rents, [70]-76.
  • Is affected by the distress proceeding from sudden revulsions of trade, [368]-372.
  • Agricultural improvements, no cause of the increase of rent, [570], [571].
• B.
• Banks, establishment of, affects the sole power of the state in coining money, [502].
  • Consequence of the Bank of England issuing too great a quantity of paper, [503]-506.
  • The assistance given by the Bank of England to commerce, accounted for, [513], [514].
  • --See Paper Currency.
  • Bounties, on the exportation of corn, lower its price to the foreign consumer, [417]-427.
  • Effects of a bounty in raising the price of corn, illustrated, [428].
  • Though such bounty may cause a partial degradation in the value of money, yet such degradation cannot be permanent, [432]-434.
  • Bounties on the exportation of manufactures raise their market but not their natural price, [436]-438.
  • The sole effect of bounty is to divert a portion of capital to an employment which it would not naturally seek, [438].
  • Evils of such a system, [439]-445.
  • A bounty on the production of corn, will produce no real effect on the annual produce of the land and labour of the country, though it would make corn relatively cheap, and manufactures relatively dear, [449]-455.
  • But the effect of a tax on corn, in order to afford a fund for a bounty on the production of commodities, would be to enhance the price of corn, and render commodities cheap, [456], [457].
  • Buchanan (Mr.), observations of, on Adam Smith's doctrine of productive and unproductive labour, [64]-66, note.
  • Remarks on his opinions respecting bounties on exportation, [440]-442.
• C.
• Capital, nature of, effects of the accumulation of, on the relative value of commodities investigated, [16].
  • Effects of, in a savage or infant state of society, [17], [18], [23], [24].
  • And in a more advanced state of society, [19]-21.
  • The relative values of circulating and fixed capitals considered, [22], [23].
  • The distinction between circulating and fixed capitals difficult to be strictly defined, [186], [187].
  • Considerations on the different modes of employing it, [83]-88.
  • The increase of capital in quantity and value, productive of a rise in the natural price of wages, [94], [95].
  • Increase of capital in quantity only, productive of a rise in the market price of wages, ibid.
  • Effects of the accumulation of capital on profits and interest, [398]-416.
  • The sole effect of bounties on exportation, upon capital, is to divert a portion of it to an employment which it would not naturally seek, [438]. Remarks on such effect, [439]-445.
  • The profits, made by the employment of capital, regulate the rate of interest for money, [512], [513].
• Carrying trade, observations on, [407].
• Circulation of money can never overflow, and why, [500], [501].
  • Circulation of Paper, see Paper Currency.
• Colonial Trade, observations on, [476], [477].
  • Proofs, that trade with a colony may be so regulated as to be less beneficial to the colony, and more beneficial to the mother country,
  • than a perfectly free trade, [477]-486.
  • Benefits of a colonial trade, [487]-490.
• Commodities, gold and silver an insufficient medium for determining the varying value of, [7], [8].
  • Corn, an inadequate standard of the value of, [9]-12.
  • The effects of an accumulation of capital on the relative value of commodities, considered, [16]-42.
  • Effects of a rise in wages on their value, [43], [44], and of the payment of rent, [45], [46].
  • Their exchangeable value regulated by the greater quantity of labour bestowed on their production by those who labour under the most unfavourable circumstances, [59], [60].
  • The prices of commodities not necessarily increased by a rise in the price of labour, [109], [110].
  • The cost of production regulates the price of commodities, [542], [567], [568], [572], [573].
• Corn, a variable standard for determining the varying value of things, [7]-12.
  • Effects of the price of, on rent, [67]-70.
  • Corn-rents materially affected by tithes, [227].
  • Advantage resulting from the relatively low price of corn, [373].
  • Bounties on the exportation of it, lower its price to the foreign consumer, [417]-427.
  • Effects of a bounty in raising the price of corn, [428].
  • A bounty on the production of, productive of no real effect on the annual produce of the land and labour of the country, [449]-455.
  • The price of corn enhanced by a tax on it, in order to afford a fund for a bounty on the production of commodities, [456], [457].
  • Benefit of a high price of corn to landlords, [474], [475].
  • Investigation of the comparative value of corn, gold, and labour, in rich and in poor countries, [527]-537.
  • The production of corn encouraged by alteration in its market price, [574], [575].
  • A fall in the value of corn beneficial to the stockholder, [586].
• Cultivation, not discouraged by a tax on land and its produce, [238].
• Currency. See Gold and Silver, Paper Currency.
• D.
• Demand and supply, influence of, on prices, considered, [542].
  • Opinion of M. Say on this subject, [544].
  • And of the Earl of Lauderdale, [545]-547.
  • Observations thereon, [547], [548].
• E.
• Economy in labour, reduces the relative value of commodities, [21].
  • Illustration of this principle, [22]-42.
• Exchange, no criterion of the increased value of money, [178].
  • To be ascertained by estimating the value of the currency in the currency of another country, [181],
  • and also by comparing it with some standard common to both countries, [181]-184.
  • Effects of paper currency on exchange, [310]-314.
• Exportation of corn, bounties on, lower its price to the foreign consumer, [417]-427.
  • Effects of, in raising the price of corn, illustrated, [428].
  • Bounties on the exportation of manufactures raise the market, but not the natural, price of these, [436]-438.
• F.
• Farmers pay more poor-rate than the manufacturers, [359]-362.
• Foreign Trade, effects of an extension of, [146], [147].
  • Proofs that the profits of the favoured trade will speedily subside to the general level, [148]-154.
• Funded Property, the price of, no steady criterion by which to judge of the rate of interest, [413]-415.
• G.
• Gold, and Silver, an insufficient medium for determining the variable value of commodities, [7], [8].
  • But, upon the whole, the least inconvenient standard for money, [80], [81].
  • On whom a tax upon gold would ultimately fall, [249], [250].
  • The value of gold ultimately regulated by the comparative facility or difficulty of producing it, [251].
  • Effects of a tax upon gold, [252]-261.
  • Evils of prohibiting a free trade in the precious metals, when the prices of commodities are raised, [309].
  • The value of gold and silver proportioned to the quantity of labour necessary to produce them and bring them to market, [499].
  • Remarks on the employment of these metals in currency, [516].
  • Their relative values at different periods, accounted for, [516]-526.
  • Investigation of the comparative value of gold, corn, and labour, in rich and in poor countries, [527]-537.
• Gross Revenue, advantages of, over-rated by Adam Smith, [491].
  • And by M. Say, [492], note.
  • Examination of this doctrine, [492]-498.
  • A diminution of gross income, no diminution of net income, [579]-583.
• H.
• Holland, low rate of interest in, accounted for, [400], note.
• Houses, rents of, distinguished into two parts, [263].
  • Difference between rent of houses and that of land, [264].
  • Taxes on houses by whom ultimately borne, [266].
• I.
• Importation of corn, effects of a prohibition of, considered, [437], [438].
• Interest, low rate of, in Holland, accounted for, [400], note.
  • Effects of accumulation on profits and interest, [398]-410.
  • Observations on the rates of interest, [412]-416.
  • The interest for money is regulated by the rate of profits which can be made by the employment of capital, [512], [513].
• L.
• Labour, the quantity of, requisite to obtain commodities, the principal source of their exchangeable value, [4], [5].
  • Effects of machinery on, considered, [9]-11.
  • Economy in labour reduces the relative value of a commodity, [21], [22].
  • Illustrations of this principle, [22]-42.
  • Adam Smith's theory of productive and unproductive labour, considered, [64]-66, notes.
  • Natural price of, explained, [90], [91].
  • Market price of, what, [92].
  • Its influence on the happiness of the labourer, [92], [93].
  • Investigation of the comparative value of labour, gold, and corn, in rich and in poor countries, [527]-537.
• Land, the division of the whole produce of, between landlords, capitalists, and labourers, is the criterion of rent, profits, and wages, [44]-48.
  • Its different productive qualities, a cause of rent, [54]-58.
  • Effects of increasing its productive powers by agricultural improvements, [70]-76.
• Landlords, tithes injurious to, [229], [230].
  • Benefit of a high price of corn to them, [474], [475].
• Land-Tax, virtually a tax on rent, [232].
  • Effects of an equal land-tax, imposed indiscriminately on all land cultivated, [234], [235].
  • Error of Dr. Adam Smith, on the inequality of land and all other taxes, accounted for, [236]-238.
  • Tax on land and its produce, no bar to cultivation, [238], [239].
  • Operation of the land-tax of Great Britain, considered, [239], [240].
  • Mistake of M. Say, corrected, [241], [242]-246.
• Lauderdale (Earl of), opinion of, on the influence of demand and supply on prices, [545]-547.
  • Remarks thereon, [547], [548].
• Luxuries, observations on the taxing of, [314].
  • Advantages and disadvantages of taxing them, considered, [327]-329.
• M.
• Machinery, effects of, in fixing the relative values of commodities, [34]-41.
• Malthus (Mr.), examination of the opinions of, on rent, [549]-566.
  • The real cost of production regulates the price of commodities, [567], [568], [572], [573].
  • Increase of population no cause of the rise of rent, [569];
  • nor agricultural improvements, [570], [571].
  • His supposition, that net income is diminished, in proportion to a diminution of gross income, disproved, [579]-583.
  • Loss of rent, the effect of a low price of corn, [587], [588].
• Manufactures, improvement of, in any country, tends to alter the distribution of the precious metals among the nations of the world, [157]-170.
  • Manufacturers pay less poor rate than farmers, [359]-362.
  • The market price of manufactures, but not their natural price, raised by bounties on their exportation, [436]-438.
• Mines, distinguished by their fertility or barrenness, [77]-79.
  • Effect of discovering the rich mines of America on the price of the precious metals, [80].
  • Observations on the rent of mines, [462]-467.
• Money, effects of the rise of, in value, on the price of commodities, [43], [44].
  • The rate of profit not affected by variations in the value of money, [46]-48.
  • Different value of money in different countries, accounted for, [170]-173.
  • The value of money, generally, diminished by improvements in the facility of working the mines of the precious metals, [178].
  • The demand for, regulated by its value, and its value by its quantity, [250], [251].
  • Low value of, in Spain, prejudicial to the commerce and manufactures of that country, [307].
  • Observations on the rates of interest for money, [412]-416, [512], [513].
  • The value of, though partially degraded by a bounty on corn, yet not permanently degraded, [432]-434.
  • The quantity of, employed in a country, dependant upon its value, [500].
  • Effects of the state charging a seignorage on coining money, [501], [524], [525].
• Monopoly-price, observations on, [340]-345.
• N.
• National Debt, observations on, [340].
• Net Revenue, advantages of, unduly estimated by Adam Smith, [491],
  • and by M. Say, [492], note.
  • Examination of their doctrines, [492]-498.
  • Is not diminished by a proportionate diminution of gross revenue, [579]-583.
• P.
• Paper Currency, circulation of, explained, [501].
  • Paper-money not necessarily payable in specie, to secure its value, [502].
  • But the quantity issued must be regulated according to the value of the standard metal, ibid. [503].
  • The Bank of England, why liable to be drained of specie for its paper currency, [504]-506.
  • Compelling the issuers of paper money to pay their notes either in gold coin or bullion, is the only control upon their abusing their power of issuing such money, [507].
  • Provided there were perfect security against such abuse, it is immaterial by whom paper money is issued, [509].
  • Illustration of this point, [510]-516.
• Poor-Laws, pernicious tendency of, as they now exist, [111], [112], [115].
  • Remedies for, [113], [114].
• Poor-Rates, nature of, [355].
  • How levied, [356]-358.
  • More falls on the farmer than on the manufacturer, in proportion to their respective profits, [359]-362.
• Population, increase of, no cause of the rise of rent, [569].
• Price (real), of things, distinguished, [4].
  • Natural and market prices distinguished, and how governed, [82]-89.
  • The prices of commodities not necessarily raised by a rise in the price of labour, [109], [110].
  • Rise of price on raw produce, the only means by which the cultivator can pay the tax imposed thereon, [195].
  • The market, but not the natural price of manufactures, raised by bounties on their exportation, [436]-438.
  • The influence of demand and supply on prices, considered, [542]-548, [567], [568], [572], [573].
  • Alteration in the market price of corn encourages its production, [574], [575].
• Produce of land, and labour of the country, must be divided between capitalists, landlords, and labourers, to afford a criterion of rent, profits, and wages, [44]-48.
  • Effect of taxes on raw produce, [194].
  • Tax on raw produce raises the price of wages, [199].
  • Objections against taxing the produce of land, considered, [201]-224.
  • Remarks on the inconveniences supposed to result from the payment of taxes by the producer, [538]-541.
• Production, difficulty of, benefits the landlord, [76].
  • The cost of production, the regulator of the price of commodities, [542], [567], [568], [572], [573].
• Profits of stock difficult to ascertain, [410].
  • The quantity of labour necessary to obtain the produce of land, is the criterion by which to estimate the rate of profit, wages, and rent, [44]-48.
  • A rise in the price of corn, productive of a diminution in the money value of the farmer's profits, [117]-122.
  • A rise in the price of raw produce, if accompanied by a rise of wages, lowers the agricultural and manufacturing profits, [125]-130.
  • Proofs, that profits depend on the quantity of labour requisite to provide necessaries for labourers, on that land, or with that capital which yields no rent, [131]-144.
  • Effects of an extension of foreign trade on profits, [146], [147].
  • Proofs, that the profits of the favoured trade will speedily subside to the general level, [148]-154.
  • And so with respect to home trade, [155]-157.
  • Further proofs that profits depend on real wages, [173]-175.
  • Tax on necessaries virtually a tax on profits, [269], [270].
  • Effects of a taxation of profits, considered, [270]-284.
  • The profits of stock diminished by a tax on wages, [285].
  • Effects of accumulation on profits and interest, [398]-416.
• Prohibition of importation of corn, effects of, considered, [437], [438].
• Provisions, causes of the high prices of, [203].
  • First, a deficient supply, ibid.—204.
  • Secondly, a gradually increasing demand, ultimately attended with an increased cost of production, [205].
  • Thirdly, a fall in the value of money, [209].
  • Fourthly, a tax on necessaries, [210].
• R.
• Rent, nature of, [49], [50], [52], [362], note.
  • Adam Smith's doctrine of rents, considered, [50], [51].
  • The different productive qualities of land and increase of population, the cause of rents, [54]-58.
  • Rise of, the effect of the increasing wealth of a country, [65], [66].
  • Influence of the prices of corn on rent, [67]-69.
  • Effects of agricultural improvements on rent, [70]-76.
  • Observations on the rent of mines, [77]-81.
  • Tax on rent falls wholly on the landlords, [220]-224.
  • Corn-rents materially affected by tithes, [227].
  • Examination of Dr. Adam Smith's doctrine concerning the rent of land, [458]-475.
  • And of Mr. Malthus's opinions on rent, [549]-566.
  • Increase of population is no cause of the rise of rent, [569].
  • Neither are agricultural improvements, [570], [571].
  • Loss of rent, the effect of low price of corn, [587], [588].
• Riches, defined, [377].
  • Difference between value and riches, [377]-386.
  • Means of increasing the riches of a country, [386]-388.
  • Erroneous views of M. Say on this subject considered, [388]-397.
• S.
• Say (M.), erroneous views of, concerning the principles of the land-tax in Great Britain, corrected, [241]-244.
  • Examination of some of his principles of taxation, [319]-324, [330], [331], notes.
  • Remarks on his mistaken view of value and riches, [388]-397.
  • Examination of his doctrine concerning bounties on exportation, [443]-448.
  • And on gross and net revenue, [492]-498.
  • Danger resulting from his recommendation respecting the charging of seignorage for coining money, [525], [526], notes.
  • Observations on his statement of the inconveniences resulting from payment of taxes by the producer, [538]-540.
  • His opinion on the influence of demand and supply on prices, considered, [544], [545].
• Scarcity, a source of exchangeable value, [2].
• Seignorage, effects of, on the value of money, [501], [524], [525].
• Simonde (M.), remarks on the opinion of, concerning the inconveniences resulting from the payment of taxes by the producer, [540], [541].
• Silver. See Gold and Silver.
• Sinking fund, in England, merely nominal, [340].
  • How conducted, [510].
• Smith (Dr. Adam), on the meaning of the term value, [1].
  • His doctrine that corn is a proper medium for fixing the varying value of other things, examined, [7]-9.
  • Strictures on his doctrine relative to labour being the sole ultimate standard of the exchangeable value of commodities, [10], [11], [575], [576].
  • And on his definitions of rent, [49], [50].
  • His theory of productive and unproductive labour considered, [64]-66, notes.
  • Correction of his erroneous view of the inequality of taxes on land, and all other taxes, [236]-238.
  • His opinion on the taxes upon the wages of labour, [286].
  • Examination thereof by Mr. Buchanan, [287]-292.
  • Observations thereon by the author of this work, [293]-306.
  • Correction of his mistaken view of taxes upon luxuries, [314]-319.
  • Remarks on his doctrine concerning bounties on exportation, [420], [422]-439.
  • Examination of his doctrine concerning the rent of land, [458]-475.
  • And on gross and net revenue, [492]-498.
  • Strictures on his principles of paper-currency, [503]-508.
  • His statement respecting the advantages of the Scottish mode of affording accommodation to trade, disproved, [515], [516]-523.
  • Remarks on his doctrine relative to the comparative value of gold, corn, and labour, in rich and in poor countries, [529]-537.
• Spain, commerce and manufactures of, injured by the low value of money there, [307].
• Stamp-duty, weight of, a bar to the transfer of landed property, [267], [268].
• T.
• Taxes, nature of, explained, [186].
  • Impolicy of taxes on capital, [190].
  • Taxes upon the transfer of property, [191].
  • On whom the several kinds of taxes principally fall, [192].
  • Objections to taxes on the transference of property, [192], [193].
  • Effect of taxes on raw produce, [194].
  • A rise of price in raw produce the only means by which the cultivator can pay the tax, [195].
  • Such tax in fact paid by the consumer, [196]-198.
  • Tax on raw produce and on the necessaries of the labourer, raises the price of wages, [199].
  • Objections against the taxation of the produce of land, considered and refuted, [201]-224.
  • Tithes, an equal tax, [225].
  • Difference between them and a tax on raw produce, [226].
  • Objections to them, [227]-231.
  • Tax on land, virtually a tax on rent, [232].
  • They ought to be clear and certain, [233], [234].
  • Effects of taxes on gold, considered, [247]-261.
  • Ground rents, not a fair subject of taxation, [267]. Taxes on houses by whom ultimately borne, [266].
  • Taxes on necessaries, virtually a tax on profits, [269], [270].
  • Effects of taxation of profits considered, [270]-284.
  • Taxes upon luxuries, [314].
  • Advantages and disadvantages of, [327]-329.
  • Supposed absurdities in taxation, explained and obviated, [315]-317.
  • Proper objects of taxation, [326].
  • Observations on the taxation of other commodities than raw produce, [330].
  • Effect of taxes to defray the interest of loans, [332]-334.
  • Remarks on the tax upon malt, and every other tax on raw produce, [346]-353.
  • Nature and operation of the poor-rate, [355]-362.
  • Examination of the inconveniences supposed to be sustained by the payment of taxes by the producer, [538]-541.
• Tithes, nature of, [225].
  • Are an equal tax, ibid.
  • Difference between tithes and a tax on raw produce, [226].
  • Tithes materially affect corn-rents, [227].
  • They act as a bounty on importation, and therefore are injurious to landlords, [229], [230].
  • Do not discourage cultivation, [237], [238].
• Trade, general causes of sudden changes in the channels of, [363]-365.
  • More particularly the commencement of war after a long peace, or vice versa, [365]-368.
  • The effects of such revulsions on agriculture, considered, [369]-376.
  • Observations on the carrying trade, [407].
  • See Foreign Trade.
• U.
• Utility, essential to exchangeable value, [2].
• V.
• Value, definition of, [1].
  • The distinctive properties of value and riches considered, [377]-397.
  • See Labour.
  • Utility essential to exchangeable value, [2].
  • Scarcity, one source of such value, ibid.
  • The quantity of labour required to obtain commodities, the principal source of their exchangeable value, [3]-15.
  • The effects of accumulation of capital on relative value, [16]-42.
  • Effects of a rise in wages, on relative value, [43], [44].
  • Effects of payment of rent, on value, [45], [46]. Variations in the value of money make no difference in the rate of profits, [46], [47].
  • The value of gold and silver is in proportion to the labour necessary to produce and bring them to market, [499], [500].
  • Investigation of the comparative value of gold, corn, and labour, in rich and in poor countries, [527]-537.
• W.
• Wages, effects of a rise in, on relative value, [27]-33, [43], [44], [48].
  • Natural and market prices of labour, [90]-93.
  • Increase of capital in quantity and value, increases the natural price of wages, [94], [95].
  • Increase of capital, but not in value, augments the market price of wages, ibid.
  • Proofs that the increasing difficulty of providing an additional quantity of food with the same proportional quantity of labour, will raise wages, [97]-104.
  • A rise in wages not necessarily productive of comfort to the labourer, [105]-108.
  • A rise of wages not necessarily productive of a rise in the prices of commodities, [109], [110], [286]-289.
  • Wages will be raised by a tax on necessaries, [269]-270.
  • And by a tax on wages, [285].
  • Effects of a tax upon wages, considered, [297]-306.
• Wealth, causes of the increase of, [66].

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