Quote of the Day for March 30, 2015

89: From Ricardo, On the Principles of Political Economy and Taxation, Chapters 28-32:

    When we speak of the high or low value of gold, silver, orany other commodity in different countries, we should alwaysmention some medium in which we are estimating them, or no ideacan be attached to the proposition. Thus, when gold is said to bedearer in England than in Spain, if no commodity is mentioned,what notion does the assertion convey? If corn, olives, oil,wine, and wool, be at a cheaper price in Spain than in England;estimated in those commodities, gold is dearer in Spain. If,again, hardware, sugar, cloth, &c. be at a lower price in Englandthan in Spain, then, estimated in those commodities, gold isdearer in England. Thus gold appears dearer or cheaper in Spain,as the fancy of the observer may fix on the medium by which heestimates its value. Adam Smith, having stamped corn and labouras an universal measure of value, would naturally estimate thecomparative value of gold by the quantity of those two objectsfor which it would exchange: and, accordingly, when he speaks ofthe comparative value of gold in two countries, I understand himto mean its value estimated in corn and labour.

    28.9 (paragraph number)

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