ABSTRACT
This chapter presents a comparison of the views about the effects of foreign trade on the total value of commodities and profits and about international exchange using Ricardo's Principles of Political Economy and Taxation and Malthus's Principles of Political Economy. It analyses Malthus's theory of foreign trade, focusing on his views on demand, the measure of value, and capital accumulation. The chapter deals with Ricardo's argument on comparative advantage. The entire production of land and labour in England is divided into two portions used to purchase foreign goods and domestic goods. On the contrary, capital accumulation caused by decreased expenditure or by the savings from revenue makes the continual increase of commodities difficult. In the process, although a transformation from unproductive to productive labour occurs, the total numbers of labourers remains the same. Thus, the value of the whole of commodities measured by the quantity of labour they command must decrease.
