Note A2-5-8 — Chapter III

"Gold and silver are by the competition of commerce distributed in such proportions amongst the different countries of the world as to accommodate themselves to the natural traffic which would take place if no such metals existed and the trade between countries were purely a trade of barter." (Ricardo, Principles, ch. 7.) In most direct opposition to the mercantile system, he represents the distribution of the precious metals to be not the cause but the effect of national wealth. A nation rapidly growing in wealth will obtain and keep a larger quota of the general supply of gold and silver. (The high Price of Bullion, 1810.) On the other hand, it depends on the one-sided abstraction with which Ricardo loves to pursue certain assumptions, that every exportation of money is made to signify a peculiar cheapness of money, and vice versa. (Opposed by Malthus, Edinb. Rev., Febr., 1811.) Carey's frequently repeated assertion, that gold and silver always flow towards those markets where they are cheapest (Principles of S. Science, I, 150, and passim), confounds cause and effect.