“Orthodox versus Unorthodox Views on Ricardo’s Theory of Money”

Résumé En

The orthodox view on Ricardo’s monetary theory is that it mixes a commodity-theory of money in the long run and a quantity-theory of money in the short run. It also contends that the weakness of this theory is to be unable to provide the link between these two determinations of the value of money – an illustration of Ricardo’s inability to link short-term and long-term analysis. The aim of the paper is at discarding this orthodox view of Ricardo’s monetary theory and at suggesting another – unorthodox – view of it. According to this latter view, Ricardo consistently linked through an explicit adjustment process a position in which money “conforms” to the standard – meaning that the value of money is determined by the value of the standard (in a way that has nothing to do with a commodity-theory of money) – and positions in which money depreciates or appreciates because its quantity is inadequate. Under certain conditions which need to be specified, disequilibrium positions adjust to the conformable position through changes in the quantity of money (in a way that has nothing to do with a quantity-theory of money). This understanding of Ricardo’s monetary theory is substantiated in my book Ricardo on Money. A Reappraisal (Deleplace 2017). Nevertheless, I contend that some of its basic aspects are shared by other scholars, in the line opened by Marcuzzo and Rosselli (1991). Another aim of the paper is at showing that what these scholars have in common results from their focus on the specific determination of the market price of the standard (gold bullion), in contrast with the orthodox view where the price of gold is only considered as a proxy of the general price level. The paper also analyses the differences that exist between these advocates of an unorthodox view of Ricardo’s theory of money.