“Absolute Value and Exchangeable Value” (1823) 76, 103, 116
aggregate demand 5, 99, 126n7; see also Say’s Law
agricultural distress 60, 74, 130, 147, 159, 192
Anti-Bullionists 27–30, 32, 36, 45, 60, 216, 228
appreciation of money 10, 93, 390–1; of Bank of England note after 1819 90, 150; caused by deficient issue of notes 101, 244, 249, 313; distinct from rise in value of money 148–50, 199; limited by seignorage 220; measure of 88, 143–4, 149, 160, 390–1; see also depreciation of money
arbitrage: by Bank of England on silver 239; domestic arbitrage between market price and legal price of gold 5, 8, 97, 117, 150, 189, 199, 226, 232, 271–2, 283n8, 313; domestic arbitrage constrains market price of bullion between limits 218–19, 229, 345–6; 357, 367–9; international arbitrage on bullion 21–2, 36, 42–3, 189, 199, 289–91, 295, 304–7, 310, 313, 327–8; 332n14; international arbitrage constrains exchange rate between limits 300–1; 316, 321, 329–30; regulates the quantity of coin 252, 257; regulates the note issue 8, 37, 117, 194, 258–62, 271, 317, 364, 386–7; see also Penelope effect; to be replaced by management of note issue 8, 11, 256, 321–4, 346, 368, 384, 386–7; see also bullion points; international adjustment
balance of payments see foreign balance
balance of trade: “adverse” 53, 81n6, 289–90, 292, 315–16; an effect, not a cause 302, 322, 332n16; and exchange rate 24–5, 289–90, 302; and international adjustment 11, 34, 54, 214n21, 287–90, 303, 315–17, 322, 335, 383; see also price-specie flow mechanism
Bank of Amsterdam 19, 23, 341, 378n4
Bank of England 19; directors, their behaviour 20, 31–2, 65–6, 196, 214n16, 214n17, 248, 321–2, 354, 370–1, guidelines to be imposed on them 31, 51, 69, see also management principle, Ricardo’s critique of 28, 162n5, 170, 195–8, 260–1, 266–7, 269, 339–40, 346, 373, 378n7; forces its notes into circulation 32, 255, 319–20, 363; “this great Leviathan” 339; opposes Ingot Plan 64, 67, 147–8, 160–2, 192–3, 338, 347–51, 356; profits of 19, 31, 67, 336–8, 344–5; regulates country notes 19, 31, 58; role in post-1819 deflation 147–8, 157–62, 191–4; and small notes 147–8, 157, 161, 191, 194, 197, 200, 378n8; varies the value of money at will 10, 65–6, 69, 217, 236, 239, 339, 383; see also resumption; suspension of cash payments; discretionary note issue
Bank of Hamburg 8, 21–3, 38–45, 328–30, 341–2, 378n3
banks: of deposit 19–20, 31, 342; of discount 19–20, 68, 362; of issue (in general) 246, 265, 269–70, 335–6, 360, 364–5, 375, 384, 390–2; see also Bank of England; central banking; country banks; free banking; public bank
barter 21, 303, 308–9, 333n18, 333n19, 384
basic commodities or products 100, 108, 284n11; gold a non-basic product 213n13, 272
bills of exchange 21–2, 47n19, 56, 288–90, 295, 303–10, 332n11, 375; “short” 22–3; “long” 22–3, 41
bimetallism: domestic see double standard; international 12, 21, 331, 334n24
bullion: exportation of 54, 219, 260–1, 269, 282n5, 283n7, 290, 295, 302–8, 317–18, 321, 326, 332n17, 333n23, 357, 374; importation of 187–9, 196–7, 254, 270, 282n3, 300, 322, 326, 340; international arbitrage on see arbitrage; minting of 168–71, 189–91, see also minting; production of 10, 180–7, 195, 198–9, 246, 383, see also gold mines; specificity of 10, 174–9, 184, 265, 270–2, 283n8, 385; as standard of money see standard of money; see also gold
Bullion Committee 28, 46n10, 47n17, 48, 50–2, 153, 166, 224, 267, 371, 378n2; see also Bullion Report
Bullion Controversy 5, 18, 29, 40–1, 45, 49–50, 55, 89, 244; as distinct from Bullionist Controversy 26–7, 46n10, 50; expression used by Ricardo 27; Thornton’s contribution to 53–4; Ricardo’s contribution to 37–8, 48–9, 55–6; see also Bullionist Controversy
Bullion Essays (1809–1811) 4, 48; continuity with later works 5–6, 90, 97–8, 102, 115, 130, 135, 138, 149, 167, 227, 232, 240, 259, 266, 277, 293, 302, 315, 376; contrast with later works 1–2, 5–7, 98–9, 113, 133, 135, 138–41, 149–50, 164–71, 180, 267, 273–6, 284n12, 336–7, 375–6; on inconvertibility 7, 49, 113, 169–70, 224–5, 266, 381; lack theoretical foundation 6, 99, 118, 135, 167, 180, 376; privileged in literature on money in Ricardo 1, 4–5, 273–5, 280, 382–3; on scarcity as foundation of value 98–9, 107, 131–5 138, 170, 180, 224–5; on the standard 109–10, 115; see also High Price of Bullion; Reply to Bosanquet
bullion points 56, 291–5, 300–1, 307, 313–14, 331n5; see also international adjustment; price-specie flow mechanism
Bullion Report: authorship of 36–7, 50–1; and the Bullion Controversy 1, 8, 26, 38, 46n7, 49–51, 55, 60, 216, 248; discussed in the House of Commons 28, 37, 41, 47n16, 51–2, 343; Ricardo on 1, 51, 59, 75, 81n4, 162n3, 248, 253, 267, 302, 311, 339–40, 361, 370; see also Bullion Committee
Bullionist Controversy 26–30; as distinct from Bullion Controversy 26–7, 46n10, 50; Ricardo’s contribution to 6–9, 65–9, 75–6, 324; three rounds of 6, 8–9, 26–7; first round 31–3; second round see Bullion Controversy; third round 59–64; Thornton’s contribution to 33–7; in the secondary literature 27, 46n8, 46n9; see also Bullionists; Anti-Bullionists
Bullionists 27–30, 32, 36, 52, 60, 91, 281
capital: competition of 221, 223–4, 271, 276; effect of durability of 99–100, 104–8, 116, 118–20, 123, 125, 128n18; mobility of 199; that pays no rent 8, 133, 135, 149, 164, 171–3, 180–2, 185, 187, 195, 203, 212; see also rate of profit
cash payments see convertibility: of Bank of England notes into coin; resumption of
central banking 46n4, 69, 355–6, 360, 389; in Ricardo 4–5, 8, 11, 256, 269, 318, 335, 374, 376, 380n21, 384, 388; in secondary literature 335, 358–60, 374
cheapest exportable commodity 306, 333n23
circulating medium 87, 385; composition of 17–19, 30–1, 49, 53, 58, 109, 224–5, 233, 295, 324, 377, 388; quantity of 134, 253, 311, 361; value of 113, 200, 224, 227, 249–50, 254–5, 346–7, 385; see also money
circulation: amount of 25, 32, 34, 47n16, 69–70, 88, 115, 119, 131, 136, 157, 195–6, 230–2, 238, 243n13, 244, 246, 248–9, 255, 257, 259, 265, 268, 274–5, 277, 282n3, 315, 320, 323, 339–40, 342, 346, 353, 356, 358–9, 364–5, 372; of coins 8, 18, 26, 30, 36, 54, 65, 69, 98, 110, 137, 157, 161, 165, 170, 180, 185, 212n9, 219, 230–3, 256–9, 267, 269, 282n4, 294, 318, 320, 375; of coins exclusively 219, 238, 241, 252–4, 256, 320, 326, 331n10; of foreign coins 89, 289–90; “forcing” the 255, 319, 343, 363; gold excluded from domestic circulation 325, 349, 357, 375, 384; the needs of 8, 136, 147, 178, 190, 202, 247, 309, 342, 361, 363, 369, see also “wants of commerce”; of notes 4, 19, 31–2, 38, 58, 61, 63, 65–6, 69, 138, 191, 200, 216, 220, 226, 233, 238–41, 244, 259–61, 303; of notes exclusively: 70, 117, 192, 245, 282n5, 305, 318–19, 344, 348, 362, 378n8; velocity of 150, 250, 263
coin see metallic money
commodities: competitively-produced 86–7, 133, 136–7, 170–1, 180, 256, 271–2, see also price: natural, gravitation of market price; produced by a monopoly 86–7, 137, 179, 202–3, 208–9, 213n11; see also basic commodities; exports and imports
commodity-theory of money 1, 4, 131, 135–6, 150, 382, 385
competition 85–7, 185, 203, 223–4, 271, 275–6, 289, 295, 309, 316; see also gravitation of market price; rate of profit
confidence: in the Bank of England note 32, 58, 371–3, 380n21; between traders 249–50, 361–2, 371, 379n14; lack of in country banks 21, 33; see also panic
convertibility: between money and the standard 7, 10, 88, 97, 117, 144, 150, 330, 383, 387, 389; of Bank of England notes into coin 35, 64, 147–8, 196, 218–19, 226–7, 269, 340, 367, 376–7 387–8, 392; both ways between coin and bullion 217–21, 226–7, 230, 256, 269, 305, see also melting of coin, minting; both ways between note and bullion (Ingot Plan) 6–9, 49, 51, 60, 66–7, 170, 232, 235, 269, 283n6, 319, 337–8, 340–2, 345–8, 368–9, 375–7, 387–8; 392; one way between note and bullion (Peel’s bill) 49, 63–4, 146, 160, 192, 214n16, 350, 376–7; of National Bank notes into coin 68, 338, 354, 356, 376–7; check on overissue 30, 32, 37, 58, 244, 259–61, 317–18, 364; and drain of Bank’s metallic reserve 32, 258, 261, 283n7, 317–18, 369–74; for foreign payments 11, 68–70, 324–5, 347, 384; and management principle 269–70, 346, 373–4, 383, 387–8, 392; before 1797 6, 41, 45, 65, 217, 324, 345, 367, 376–7; suspension of 19, 22, 24, 26–9, 31, 57, 65, 168, 266–7, 381; resumption of see Peel’s bill; resumption of cash payments
corn: differs from gold 10, 177–9, 183, 214n19; effect of a new land producing 174–7, 212n8; imports of 92, 302, 311, 322, 333n23; price of 156, 159–62, 220, 222–5, 275, 296, 242n3; and other prices 92, 127n14; produced in one year 107; as a standard (denied) 153, 297–8; and wages 126n8, 173, 222–3; see also corn-ratio theory of profits
corn-ratio theory of profits 105–6
cost of production: of gold bullion 116, 135, 149–51, 165, 181–4, 186–7, 189, 193–5, 201–5, 208–10, 213n15, 272, 382–3; in the mine that pays no rent 171, 181–2 195, 203; regulates natural price 8, 86, 100, 127n15, 133, 135, 149, 164, 171, 173–4, 179–80, 193, 212n6, 272, 307; regulates the supply: 224; and the value of money: 131–3
country banks: in existing monetary system 19, 33, 57, 65, 87, 217, 377; in Ingot Plan 65, 343, 377; in Plan for a national bank 68, 352; in Bank Charter Act (1844) 377; notes regulated by Bank of England 19, 31, 58; run on 21, 33
credit market 87, 232, 355–6, 360–2, 372; see also confidence; lender of last resort
crises 20–1, 31, 280–1, 284n13, 355–6, 358, 360–1, 389; of 1793–1797 20–1, 26, 31, 33, 36, 56–7, 361–2, 370–1, 379n14; postwar 280–1, see also agricultural distress, deflation; of 1825 47n15, 65; of 1847, 1857, and 1866 70, 82n15
currency see money
Currency School 65, 69, 82n15, 244
debasement of coin 18, 228; avoided with paper money 342, 373; causes high price of bullion 10, 18, 25, 44, 89–90, 138, 216–18, 227–32, 324, 373, 386; identical with notes in excess 201, 230–2, 242n5, 261, 383
deflation (general fall in prices): alternative to devaluation 61–3, 81n11; caused by contraction of note issue 147–8, 193, 195–7, 340, 364–5; by rise in the value of bullion 147–8, 157–62, 191–3; by lagged coining 253–4; identical with rise in the value of money 92; Ingot Plan blamed for 65–7, 147–8, 351; postwar 27, 46n9, 61, 235, 351
depreciation of money 114, 141–3, 145, 390–1; caused by debasement of coins 10, 18, 25, 44, 89, 138–9, 216–18, 227–32, 373; caused by double standard 138, 216, 233–5; caused by excess issue of notes 5–6, 30–2, 50–4, 138–9, 216–17, 244, 259, 382–3; caused by prohibition of melting 138, 216, 219–20; not caused by increase in production of gold 164–71, 198; distinct from fall in value of money 6, 9, 88, 91–2, 98–102, 125n2, 135–41, 145–6, 162n2, 163n9, 168, 197–8, 298; effect on exchange rate 9, 39, 56–7, 295, 301–10, 313, 326–8; on incomes 62, 130; on prices 98, 101, 163n7, 166–8, 215, 221–5, 303–4, 306–7; no limit under inconvertibility 37, 131, 258, 267–8, 275, 319–20; measured by high price of bullion 10, 29–30, 32–3, 37–8, 54–8, 81n11, 88, 91–2, 94, 141–3 150, 197–8, 262, 267–8, 369; prevented by Ingot Plan 341–3, 372–3; see also Bullion Controversy; money; Money-Standard Equation
devaluation 232, 240; alternative to deflation 61–3, 81n11
difficulty of production: cause of price 165, 170, 177, 212n6, 222–3, 296; of gold 8, 122, 177, 253, 270, 385; see also cost of production
discount lending by Bank of England: “makes the capital of the country available” 341–2; but could and should be separated from note-issuing 68, 365
discount rate: and monetary policy 82n15, 358; Thornton on 35–7, 360–1; Ricardo on 255, 361–3; upper limit in England 35, 362, in France 22; see also rate of interest; Usury Laws
discretionary note issue: adjustment to 7, 10, 20, 244, 247, 251, 255–62, 265, 270, 321, 335, 382–3; analogy with a new gold mine 10, 133–6, 162n4, 164–71, 227, 274–5, 383; by Bank of England 10, 65, 69, 217, 235, 239, 243n12, 282n3, 337–40, 345–6 367, 376–7; as monetary policy 53–4, 278, 347, 358–67, 384
double standard: in France 22–3, 29; legal in England until 1816 17–18, 162n1, 234, 242n7, 243n8; reintroduction discussed at time of resumption 60–1, 81n9, 235; Ricardo’s opposition to 10, in High Price 109–10, 232–4 in Principles 232, at the time of resumption 81n9, 232–41; in practice an alternating single standard 233–4; relation with behaviour of Bank of England 237–40
drain of Bank’s metallic reserve: caused by a panic 370–3; internal or external 11, 20–1, 30, 324, 343, 367, 369, 373–4; triggered by arbitrage 37, 346, 384; effect on discounts 20, 30, 32; see also Penelope effect
“euthanasia of metal currency” 11, 335, 347, 349, 388
excess of money 246–9; cause of depreciation 5–6, 30–32, 50–4, 138–9, 216–17, 244–6, 259, 382–3, of unfavourable exchange rate 28, 32–3, in Thornton 36, 54, in Ricardo 9, 11, 50, 54, 56–9, 230–1, 287, 302, 310–15, 322–4, 333n22, 371, 373, 383; endogenously corrected 255–65, 383; impossible for coins 165–9, 198, unless debased 217, 227, 230–2, 383; prevented by management of note issue see Ingot Plan, management principle; test of 32–3, 262, 314–15, 321, 386–7; see also Bullionist Controversy; quantity of money: conformable
exchange rate: assessing favourable or unfavourable 29–30, 55–6; and bullion points 24, 56, 157, 290–1, 296, 305–6, 316, 373; correcting it, in Thornton 34–6, 54, in Ricardo 357, 374; links domestic and world price of bullion 188–90, 272, 383, 393; and note-issuing rule 30, 51, 53, 65–6, 196–7, 340, 349, 360, 373, 384; nominal vs real 282n5, 295–6, 301–7, 312–14, 323; real causes of unfavourable 28, 30, 32, 52, 302, in Thornton 34–5, 287, in Ricardo 310–15, 322–4, 357, 360, 374, 383; redundant money cause of unfavourable 28, 32–3, in Thornton 36, 54, in Ricardo 9, 11, 50, 54, 56–9, 230–1, 287, 302, 310–15, 322–4; 333n22, 371, 373, 383; restricted note issue cause of favourable 161, 195, 253–4, 282n3, 313, 340; “short” vs “long” 22–3, 41; test of depreciation 32–3, 50, 90–1, 242n5, 314; varies with supply and demand of bills 189–90, 194, 289–90, 304–7, within limits 22, 56–7, 291, 293–5, 301, 316, 318, 326–8, 331n6, 383, 394, unless inconvertibility or obstacles to bullion transfer 297, 319–20, 331n10; range of variation affected by difference in standards 328–31, 333n24, narrowed by Ingot Plan 319–21; with Hamburg 22, 38–45, 56, 304, 371, Paris 22, 292–3, 393–4, Rio de Janeiro 295–6, 331n8; see also international adjustment; par of exchange
Exchequer bills 21, 82n14, 353, 361, 379n13, 379n14
exports and imports: of American gold against European cloth 202–9; of English cloth against Portuguese wine 287, 307–8; of gold purchased in London market against Hamburg commodities 301–7; imports of corn 92, 302, 311, 322, 333n23; see also balance of trade; price of a commodity: if imported
foreign balance: assessment of 29, 45; causes an export of bullion if unfavourable 20, 29, 194, 290; and exchange rate 30, 52, 291, 302, 311, 313; exogenous causes of 36, 90, 310, 360; and international adjustment 25, 310; for Ricardo an effect not a cause 9, 55–7, 59, 287, 302
general price level 85, 89–92, 96–8, 100–2, 126n4, 127n17, 151, 214n21, 263; market price of bullion not a proxy of 96, 116, 296, 317, 332n15
gold: Bank of England’s reserve of 26, 34, 61, 63, 67, 69–70, 82n14, 82n16, 155, 160, 165, 191–2, 194–200, 214n17, 261, 270, 318, 357, 367, 374, 376–7 see also drain of Bank’s metallic reserve; cheapest exportable commodity 306, 333n23; difficulty of production of 8, 122, 177, 253, 270, 385; exportation of 54, 219, 260–1, 269, 282n5, 283n7, 290, 295, 302–8, 317–18, 321, 326, 332n17, 333n23, 357, 374; importation of 187–9, 196–7, 254, 270, 282n3, 300, 322, 326, 340; high market price of 9, 28–30, 50, 52, 54–8, 94, 110, 135, 138, 162n5, 194, 228, 230, 232, 261–2, 371, 380n20, 383; London banks’ reserve of 19–20; natural price of 10, 127n16, 165, 181–90, 195, 199, 201–3, 208–11, 213n15, 271, 392–3; spread between market price and legal price of 11, 55–6, 65, 89, 130, 141, 150, 224, 261–2, 340, 352, 365, 376, 384, 388, 392, see also arbitrage, management principle; as standard see standard of money; unnecessary purchases by Bank of England 67, 148–51, 160–1, 191–8, 349; value and price of, distinguished 55, 110, 130, 135, 138, 141, 149, 162n5; value of, in commodities 63, 93, 253, 257, 270, in silver 39, 42–3, 45n3, 46, 47n21, 57, 216, 233–5, 238–9, 241; see also bullion
gold-exchange standard 5, 11, 70, 321–5, 347, 352, 357, 375, 384
gold mines: analogy with Bank of England 10, 133–6, 162n4, 164–71, 227, 274–5, 383; effects of discovery of new 10, 127n16, 135, 164–72, 179–83, 185–6, 188, 190–4, 198–200, 213n16, 246, 257, 272, 382; productivity of 183–5, 209, 213n15; rent on see rent
gold points see bullion points
gravitation of market price 256, 271, 276, 387
High Price of Bullion (1810–1811): and Bullion Controversy 1, 6, 48, 55; Appendix outlines Ingot Plan 51, 59, 170, 232, 247, 336–7, 341–4; reviewed by Malthus 81n5, 332n16; its title sums up Ricardo’s argument 33, 37, 50, 58, 91–2, 138, 262; see also Bullion Essays
inconvertibility 56–8, 110, 134, 164–5, 168, 256, 258, 317–18, 383; and Money-Standard Equation 268–70; no standard of money under: 4, 110, 137, 170, 266–8, 319, 376, 381; see also convertibility: suspension of
inflation (general rise in prices): context of 27, 46n9, 60, 280–1; identical with fall in the value of money 93, 102; caused by excess note issue 91, 102; by fall in the value of bullion 102; by taxation, in the Bullion Essays 98, but not in Principles 101; no inflation targeting: 116
Ingot Plan 8, 59, 65, 377, 392–4; adopted partially in 1819 see Peel’s bill; abandoned in 1821 49, 64, 66, 68, 147–8, 193, 350; opposed by Bank of England 49, 64, 147–8, 160–1, 192–3, 338, 347–51, 356; blamed for post-1819 deflation 65–7, 147–8, 152–5, 192–3, 351; in High Price 51, 59, 170, 232, 247, 337, 341–4; in Proposals 65–6, 114, 155–6, 337, 344–51, 376–7; in Principles 65–6, 338, 345; Ricardo’s phrase 345, 351; greatest pride 351; economy in the use of gold 66, 113, 155, 159–61, 209, 247, 342, 344, 347, 357–8, 374–5; forerunner of gold-exchange standard 5, 11, 324–5, 347, 356–7, 375, 384; manages the quantity of notes 59, 65, 364–7; notes convertible into bullion see convertibility: both ways between notes and bullion; prevents drain of metallic reserve 269–70, 369–74; stabilises price of bullion 131, 221, 244, 318, 356–7, 367–9, also exchange rate 319–21; as a permanent system 6–7, 9, 79, 160–1, 337, 348–50; as a temporary device 64, 147, 338, 341, 348–50; praised by Keynes 70, 82n15, 324–5, 347, 352, 358; resurrected by Marshall and Lindsay 70, 117, 243n9, 325, 351–2; 358; revolutionary character 65–6, 347–8, 358, 375, 384, 388; in secondary literature 82n12, 280, 340–1, 347, 351, 358, 375
ingot principle: in the Ingot Plan see Ingot Plan; in the Plan for a national bank 356–7, 366; see also convertibility: both ways between notes and bullion
integration of money in the theory of value 2, 88–9, 150, 264–5, 270, 272–6, 382, 384–6
interest rate see rate of interest
international adjustment: by import of bullion when discovery of new gold mine 187–91, when increased demand of gold by issuing bank 191–8, when increased “wants of commerce” 253–4; by export of bullion when overissue 258–9, 301–8, 316–17, 332n17, followed by import of commodities 302–3, 306–8, 317, replaced under convertibility by domestic contraction of note issue 11, 317–18, 321–4, 373, 383–4; market for bullion centre stage in 296, 301, 317–18; not a barter 308–10; not a price-specie flow mechanism 288, 310, 315–17, 383–4; see also bullion points; Ingot Plan; management principle; Penelope effect
invariable measure of value 87, 103, 109, 118, 128n19, 142, 146, 242n6
labour, quantity of: as cause of value 86, 99, 104, 107, 116, 133, 136, 171, 207, 222, 242n1
legal tender: Bank of England notes deprived of 20, 31, 46n11, 65, 87, 243n13, 372, 376–7; bullion deprived of 65, 324, 347; of currency 58, 87, 89, 188, 221, 229, 231, 234, 289–90, 376–7; of gold coins 42, 57, 234, 376–7; of silver coins 18, 45n3, 57, 216, 234–5, 243n12
lender of last resort: the Bank of England as 20, 31; in Thornton 34, 36–7, 360; in Ricardo 358–62, 372
management principle: condition of “perfect currency” 11, 366, 374, 376, 384, 388; in Ingot Plan 65–6, 269, 346–7, 367, 377, 392; in Plan for a national bank 67, 69, 356, 377; a note-issuing rule 346–7, 364–5; replaces bullion flows in adjustment 269–70, 368, 373–4, 384
mass of prices see general price level
melting of coin: cost of 218–19, 230, 293, 320, 324, avoided in Ingot Plan 341, 345–6, 368, 392, 394; law against exporting and 181, 217, a cause of depreciation 216, 219–20, 230, 257, 320, 377, but easily evaded 20, 217, repealed in 1819 350; melting pot corrects excess note issue 218–19, 238–9, 244, 256–60, 264, 267–9, 305, 386–7; stabilises money and exchange 169, 230–2, 243n13, 300, 313, 318, 367, 392–3
metallic money: euthanasia of 11, 335, 347, 349, 388; as only circulating medium 219, 238, 241, 252–4, 256, 320, 326, 331n10; see also debasement of coin; melting of coin; minting; recoinage
mint price: of gold and silver 17–19; role in regulation of money by standard see gold: spread between market price and legal price of
minting: cost of see seignorage; and adjustment after discovery of new gold mine 189–91, after increase in the “wants of commerce” 251–4; stabilises money and exchange 217–21, 230, 313, 318, 320, 367, 392–3
monetary policy 11; discretion or note-issuing rule 347, 360, 363–5, but quantity of money endogenous 365–6; Ricardo different from Thornton on 360–1; in secondary literature 5, 358–60; see also central banking; discount rate; discretionary note-issue; management principle; open-market operations
money 87, 102; not a commodity see commodity-theory of money; conformity to standard 9, 93–7, 109, 113–14, 117–18, 126n6, 188–9, 196, 215, 245, 252, 262–4, 268–70, 323–4, 375, 382–3, 390–2; demand for 63, 178, 253–4, 263–4, 275–7, 284n13; effects of change in the value of, on competition of capitals 221–4; on incomes 62–3, 130, on prices 97, 101, 111–12, 115, 119–25, 147–8; 158–9; 222–3, on taxation 130, 192; “equilibrium of” 298, 309, 317, 332n12; metallic see metallic money; neutrality or non-neutrality 5–6, 89, 101, 112, 119–25, 263–4, 270, 278, 280, 359; “perfect currency” 9, 11, 66, 72, 93, 96, 113, 117–18, 221, 256, 268, 324, 345, 366, 373, 375, 384, 386, 388; and rate of interest see rate of interest; redundancy of see excess of money; relative value of 93, 111, 140, 294, 309, 332n12, of currencies 331n6; standard of see standard of money; value of 88–98, 101–2, 115–16, 126n6, 151, causes of change in the value of 9–10, 130–1, 135–7, 246–7, 270, 381–2, see also Money-Standard Equation; velocity of circulation of 150, 249–50, 263, 281; see also appreciation; circulating medium; depreciation; devaluation; quantity of money
Money-Standard Equation 9, 143–6, 163n8, 375, 381–2, 387, 391–2; as distinct from the Quantity Theory of Money 262–5, 374, 382–3; does not apply to inconvertibility 268–70; embodies Ricardo’s mature theory of money 145–6, 298, 314–15, 351, 383, 385; factual illustration of 146–9; and international adjustment 317; and monetary shocks 201, 215, 230, 245–7, 251–8; and real shocks 190, 198–201, 369; textual evidence of 155–62
monopoly of coining 136–7, 179, 217
monopoly of note issue: of the Bank of England in the London area 19, 137, 377; of the Bank of France in Paris 22; according to Thornton 35, to Ricardo 9, 49, 67–8, 137, 352, 377; see also Bank of England; country banks; public bank
Napoleonic wars: effects of 17, 21–2, 294, 299, 314; effects of their ending 18, 46n9, 49, 111, 366
note-issuing rule see management principle
numéraire 126n5
open-market operations 5, 9, 356, 359, 363, 365, 389
overissue of notes see excess of money
panic: in 1793–1797 20–1, 33, 370; and irrationality 371–2; no system can guard from 370, 373–4; see also confidence
paper money: public nature of 11, 67, 335–9; see also public bank
par of exchange: legal 29, 288–9, 291, 294–5, 299–301, 313; real 291, in Steuart 22, 291–3, in Ricardo 11, 288, 293–5, 299–301, 311–12, 331n7, 332n15, 333n21, 383, not a proxy of purchasing power parity 296–8, 317; with different standards 328
Peel’s bill: adopted by Parliament 49, 60, 66, 147–8, 191, 194, 325, 350; ascribed to Ricardo by opponents 147–8, 152–5; based on Ingot Plan 63–4, 74, 160, 192, 376–7; but only partially 64, 147, 156–7, 214n16, 350, 364–5, 376–7; responsible for only part of deflation 148–9, 155–62, 197–8
Penelope effect 259–69, 283n7, 318, 321, 364, 373, 383, 392
permanent versus temporary: causes 8, 78, 86, 104, 126n12, 170–1, 175–6, 193–4, 198, 200, 222–3, 259, 270, 280–1; 283n8, 382; effects 6, 9, 98, 109–10, 132, 135–6; 164–5; 185, 187, 189, 192, 198, 201–2; 205, 214n21, 232–3; 242n6, 244, 251, 259, 261, 277, 317, 364, 368, 383; Ingot plan to be 6–7, 9, 64, 79, 147, 160–1; 337–8; 341, 344, 348–50
Plan for the Establishment of a National Bank (1824) 6–7, 67–9, 338, 376–7, 378n9, 384; in modern literature 358–9; see also public bank
policy rule see management principle
political economy: attacked 72–3; Ricardo’s divergence with Malthus on 12, 72, 78–9, 281; the science of 58, 73, 108, 212n6, 218
precious metals see bullion; gold; silver; standard of money
price of a commodity: causes of change in 111–12, 222, 296; distinguished from value 85–6; if imported 179, 203, 209, 213n12, 309; market 86, 170–1, 174–7, 225–6, 271, 302, 306, 387; if monopoly 86, 137, 179, 201–2; 208, 213n12; natural 86, 170–1; 174–9; 213n12, 271, 283n8, 386; supply and demand, effect on 86, 111, 127n15, 132, 176, 179, 217, 367; see also value
price-specie flow mechanism 11, 214n21, 335; in Hume 24, 26, 70, 287; not in Ricardo 288, 310, 315–17, 383–4
“principle of limitation of quantity” 10, 137, 217, 230, 261–5; 383
On the Principles of Political Economy, and Taxation (1817–1821): as distinct from the Bullion Essays 1–2, 6, 99, 133, 135, 139–41, 166–71, 180, 273–4; 280, 375–6; on international trade 179, 296–8; 307–8; 326–7; 332n12; on money 1–2, 6–7, 65–7, 118, 136–7; 216–17, 231–2; 261, 337–8; 347, 354–5; on profit 99–100, 104–6; 222–3; on rent 171–6; on Say’s Law 5, 99; on standard 115, 118; on taxation 100–1; 119, 181, 201–8; on value and distribution 1, 4, 7, 85–6, 99–100, 102–6; 111, 116, 119, 135, 149–50, 164, 256, 375, 381; the writing of 111, 180, 222, 296
profits see rate of profit
Proposals for an Economical and Secure Currency (1816): concerns money with a standard 4, 7, 93–4, 170, 227, 262, 366, 381; as distinct from the Bullion Essays 1–2, 6, 130, 275–6; 278, 337, 375; quoted by Ricardo in Principles 65–6, 338, 345; in a speech 139–40; in a drafted letter 155; relation with Principles 111, 150, 221–2; 256, 337–8; 375, 381; a turning point in Ricardo on money 2, 344, 366, 375, 381; see also Ingot Plan
public bank: in 1815 letter 67, 336; in Proposals 67, 337; in Principles 67, 337–8; in Plan for a National Bank 5–6, 9, 67, 338, 377; substitutes for Bank of England 7, 49, 67–8, 337–8; independence of commissioners 67–8, 336–7; 354–6; see also open-market operations
public debt 19, 67, 82n14, 209, 389; holders of (“public creditor”) 62, 130; redemption by tax on property 73–4, 153
purchasing power parity 296–8; 317, 332n13
quantity of money: affects value of money only in disequilibrium 8, 263–5; 382–6; 390–1; causality with value of money 1, 131–5; 150, 382; conformable 245–52, 264–5; 270, 281, 319–20, 364, 368, 382, 386–7; 390–2; see also money: conformity to standard; no consideration for absolute 323, 36, 365, 369; deficient 195–6; 215, 227, 255, 262, 314, 332n16, 387, cause of appreciation 101, 246, 364–5; of favourable exchange rate 161, 195, 253–4; 282n3, 313, 340, endogenously corrected 8, 264, 270, 282n3, 321, 340, 345–6; 353, 364; no natural quantity 178, 283n8; the Quantity Theory of Money 5, 24, 98, 263–5; 272–3; 278, 315–17, 382, 386, usually ascribed to Ricardo 5–6, 131–5; 215, 272–82, 288, 335, 359, 374, 383, 386; no quantity theory of money in Ricardo 4, 7, 10–11, 98, 150, 245, 262–5, 270, 278, 281–2; 283n8, 288, 315–17, 382–3; regulated by the standard 4, 7–8, 114, 201, 244, 262–5; 269–70, 317–18, 374, 380n21, 381–2; see also excess of money; money: demand for
rate of interest: not affected by Bank of England rate 68, 363, nor by quantity of money except temporarily 6, 135–6; 274, 277, 364; approximated by rate of London discount banks 362; in cost of international transfer 293; in minting cost 19, 218, 367, 379n19; market rate should govern Bank of England rate 361–4; 379n15; monetary policy and 360, 366, 389; natural level 37, 274, 276, 278, 363; regulated by rate of profit 68, 276–7; 363, 385; not a transmission channel to prices 227, 265, 276–8; upper limit evaded 19–20; in Thornton 34–6; in secondary literature 276–7; 379n17
rate of profit: not affected by change in value of money 222–5; 296; central issue in Ricardo 1–2, 111, 366; and mobility of capital 79, 122–5; 172, 174–6; 181–4; 189, 199, 201, 213n15; natural level 86, 119, 171–4; 182–3; 187, 189, 271–2; 284n11; regulates rate of interest 68, 276–7; 363, but reverse causality in Sraffa 385; and taxation 99–101, 119–25, 126n9, 201–11; variations affect exchangeable values 104–7; 111, 118, 222, 242n1; varies inversely with real wages 97, 100, 104–7; 116, 118, 126n8, 174–5; 183, 189, 222–3; 242n2, 296
real bills 244, 248, 339–40, 378n2; doctrine 30, 32, 36, 247
recoinage 17–18, 25, 57, 216, 231–2
rent: absolute 202, 211; differential 171, 174, 185; of mines 171–4; 182–3; 195, 202–7; portion of capital paying no 8, 133, 135, 149, 164, 171–6; 180–2; 185, 187, 195, 203, 212n4; theory of 10, 68, 126n9, 165, 171–5; 212n4
Reply to Bosanquet (1811) 6; analogy between gold mine and Bank of England 134, 166, 168; on fall in exchange rate 55–6, 303, 305; on interest alone governing trade movements 333n23; on paper standard 268; on price of bullion abroad 38–41; on real bills 247–8; on real exchange 333n21; see also Bullion Essays
resumption of cash payments: in Bullion Report 36, 50–2, 59; in 1821 6, 8–10, 26, 28, 49, 63–4, 67, 147–8; 156–7; 160–1; 191, 235, 338, 341, 350, 365
“Ricardoes” 64
Ricardo-Sraffa tradition 284n10, 385–6; 394n2
run see panic
Say’s Law: in Ricardo 5, 99, 278–82, 359, 383; and the Quantity Theory of Money 5, 265, 278, 282
scarcity: as foundation of value in Bullion Essays 98–9, 131, 133–5; 138, 170, 180, 225; of coin 44, 320
seignorage: and bullion flows 25, 29; minting cost 18–19, 22, 137, 188, 217; and double standard 236–41; and margin of variation in price of bullion 217–21, 243n12; and paper money 67, 137, 231, 243n13, 336–9; 378n1; useful if moderate 220–1; 239, 357
shocks on the value of money 198–201, 246–7; 381, 383–4; monetary 11, 201, 215–17, 226–7; 247, 287–8; such as debasement 227–8; 230–2; or discretionary change in note issue 255, 272, 296, 303, 317–18, 321, or modification in “wants of commerce” 247–9; 251; real 194, 198–201, such as discovery of new gold mine 165, 187–91, or increased demand of gold by Bank of England 191–4; or others 25, 33, 36, 323; see also international adjustment; Money-Standard Equation
silver: changing views on silver better standard than gold 60, 116; standard in Europe 8; standard in Hamburg 21, 23, 29, 40, 43–5, 56, 299; as token currency 18, 59, 70, 235, 348; see also double standard; legal tender
standard of money 87–8, 102; centre stage in Ricardo’s theory of money 2, 4, 262, 284n12, 381; sole commodity with market price and legal price 189, 270–2; 283n8, 284n10, 306, 383, 385; often confused with money 385; dilemma between stable value and stable price of 9, 116–18, 128n19, 149, 201, 388; distinct from numéraire 126n5; in England 17–18, 29, 46n3, 56–9, 61, 81n7, 87, 146, 162n1, 216, 234, 242n7, 243n8, 299; in Europe 8; in France 22–3, 29; in Hamburg 21, 23, 29, 40, 43–5, 56, 299; gold as 7, 18, 88, 105, 118, 376–7; rather than silver 60, 116; invariable value assumed in theory of price 111–12, 116, 118, 127n14, 128n19, but not in practice 110, 113–16, 139–40, 155–6; 164, 191, 201, 217, 271, 345, 375; is not the “mass of commodities” 97, 115, nor a composite commodity 107–8; 116–17, nor the banknote 268; its market price affects other prices 190, 224–7; and is often understood as proxy of general price level 90–1, but not by Ricardo 96, 116, 296, 317, 332n15; money without standard 4, 110, 137, 170, 266–8; 319, 376, 381, see also inconvertibility; precious metals chosen because less variable in value 110, 113, 116, 127n16; public debt as 5, 388–9; regulates quantity of money 4, 7–8, 114, 201, 244, 262–5; 269–70, 317–18, 374, 380n21, 381–2; should be non-basic 213n13, 272, and produced abroad 179, 272, 284n12, 383; social character of 117, 128n18, 374–5; spread between market price and legal price of see gold, management principle; and standard of value 88, 95, 102, 108–9; 116–18, 126n11, 128n18, 128n20, 221, 325, 378n3; see also convertibility; double standard; gold; gold-exchange standard; money: conformity to standard; Money-Standard Equation
standard of value: definition 87, 102; invariability of 4, 87, 102–5, 127n14, 128n19, 150; impossibility of 103, 115, 217; medium between extremes 116–18; and standard of money 88, 95, 102, 108–9, 116–18, 126n11, 128n18, 128n20, 221, 325, 378n3; and wage-profit relationship 106–8
supply and demand: and price of bullion 111, 127n15, 217, 367; and prices of commodities 78, 86–7, 176, 179, 212n6; and value of money 132, 265
suspension of cash payments see convertibility: suspension of
taxation: burden of 130, 162, 192; effect on aggregate demand 126n7; on comparative advantage 332n12; on general price level 98–101, 118, 224, 253–4; on relative prices 99–102, 119–25, 209–11; of gold 177–8, 181–2, 201–11; and non-neutrality 101, 119–25; of profits 99–101, 119–25, 126n9; of property to pay off National debt 73–4, 153; of wages 100, 126n8
Thornton’s “error” 55, 110, 135, 138, 141, 162n5
token currency: silver coin as 18, 59, 70, 235, 348
trade balance see balance of trade
Usury Laws: and maximum rate of interest 19–20, 35, 362
value of a commodity: absolute 85, 87, 102–9, 112, 140, 198; distinguished from price 85–6; exchangeable 85–8, 99, 103, 106, 108–9, 111–12, 116, 128n19, 163n5, 171, 222, 224, 250, 337–8, 366, 385; measure of 42, 63, 87, 103–10, 114, 118, 127n16, 128n19, 142, 146, 216, 228, 233, 242n6, 342; natural 86–7, 190, 202, 204–5, 213n12; nominal 87, 233; real 68, 86, 103, 112, 282n5, 295, 305, 363; relative 85, 88, 99–100, 103, 108, 180, 222, 225, 242n1, 296, 309; Ricardo’s early conception of see scarcity; in Ricardo’s Principles 1, 4, 7, 85, 99–100, 102–6, 111, 116–19, 135, 174–7, 180, 222, 256, 375, 381; see also capital: effect of durability of; price
wages: effect on prices 93, 97, 99–100, 104, 112, 213n12; on rate of profit 97, 104–7, 116, 118, 126n8, 174–5, 183, 189, 222–3, 242n2, 296
“wants of commerce”: depend on value of currency 248, also on state of credit 249–50; effect of increase in all countries 282n1; and Ingot Plan 247, 321–4, 342–3, 369, 375; paper money better adjusted than coin to 247, 254–5; and quantity of money 8, 10, 247–54, 256, 262, 265, 283n8, 382, 390; see also money: demand for; quantity of money: conformable
wealth 81n6, 130, 193, 207–8, 290, 316, 347
The Works and Correspondence of David Ricardo (1951–1973) 2, 13n1, 26, 71, 75–80, 384