"Gold and silver, like other commodities, have an intrinsic value, which is not arbitrary, but is dependent on their scarcity, the quantity of labour bestowed in procuring them, and the value of the capital employed in the mines which produce them"
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Ricardo is trying to drain the romance out of money. By insisting that gold and silver have "intrinsic value" grounded in scarcity and labor, he’s pushing back against the idea that value is a mere social agreement or a monarch’s decree. This is early-19th-century Britain: banknotes are spreading, war finance and suspension of gold convertibility have stoked inflation anxieties, and the question of what anchors prices is no longer academic. Ricardo’s move is to relocate monetary legitimacy from politics to production.
The subtext is a defense of classical political economy’s hard-edged moral geometry: value comes from real costs, not from narrative. Notice how he builds a chain of constraints. Scarcity supplies a natural limit, labor supplies a measurable input, and "capital employed" smuggles in an institutional reality: mines aren’t just holes in the ground, they’re organized, financed, risk-managed enterprises. He’s telling readers that even the most fetishized of commodities obey the same discipline as wheat or cloth. Precious metals only look special because they’ve been culturally appointed as money; economically, they are output.
It also doubles as a subtle critique of monetary tinkering. If the value of money ultimately tracks conditions of extraction and investment, then attempts to manufacture prosperity through paper issuance can’t escape the gravitational pull of material costs. Ricardo’s point isn’t that gold is magically valuable; it’s that even gold’s mystique is, underneath, a ledger of scarcity, work, and capital.
The subtext is a defense of classical political economy’s hard-edged moral geometry: value comes from real costs, not from narrative. Notice how he builds a chain of constraints. Scarcity supplies a natural limit, labor supplies a measurable input, and "capital employed" smuggles in an institutional reality: mines aren’t just holes in the ground, they’re organized, financed, risk-managed enterprises. He’s telling readers that even the most fetishized of commodities obey the same discipline as wheat or cloth. Precious metals only look special because they’ve been culturally appointed as money; economically, they are output.
It also doubles as a subtle critique of monetary tinkering. If the value of money ultimately tracks conditions of extraction and investment, then attempts to manufacture prosperity through paper issuance can’t escape the gravitational pull of material costs. Ricardo’s point isn’t that gold is magically valuable; it’s that even gold’s mystique is, underneath, a ledger of scarcity, work, and capital.
Quote Details
| Topic | Money |
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