II
ThefollowingfromhisPrinciplesofPoliticalEconomyp。511
putsthesubstanceofRicardo\'stheoryoftherateofinterest:
\'TheinterestofmoneyisnotregulatedbytherateatwhichtheBankwilllend，whetheritbe5，3or2percent。，butbytherateofprofitwhichcanbemadebytheemploymentofcapital，andwhichistotallyindependentofthequantityorofthevalueofmoney。WhethertheBanklentonemillion，tenmillions，orahundredmillions，theywouldnotpermanentlyalterthemarketrateofinterest；theywouldalteronlythevalueofthemoneywhichtheythusissued。Inonecase，tenortwentytimesmoremoneymightberequiredtocarryonthesamebusinessthanwhatmightberequiredintheother。TheapplicationstotheBankformoney，then，dependonthecomparisonbetweentherateofprofitsthatmaybemadebytheemploymentofit，andtherateatwhichtheyarewillingtolendit。Iftheychargelessthanthemarketrateofinterest，thereisnoamountofmoneywhichtheymightnotlend；¾；iftheychargemorethanthatrate，nonebutspendthriftsandprodigalswouldbefoundtoborrowofthem。\'
Thisissoclear-cutthatitaffordsabetterstarting-pointforadiscussionthanthephrasesoflaterwriterswho，withoutreallydepartingfromtheessenceoftheRicardiandoctrine，areneverthelesssufficientlyuncomfortableaboutittoseekrefugeinhaziness。Theaboveis，ofcourse，asalwayswithRicardo，tobeinterpretedasalong-perioddoctrine，withtheemphasisontheword\'permanently\'half-waythroughthepassage；anditisinterestingtoconsidertheassumptionsrequiredtovalidateit。