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Often appears with: trade, markets, and merchants · money, coin, and credit · labor, wages, and the division of work · taxation, tribute, and revenue · agriculture and the land · public finance and debt · famine, scarcity, and plenty · wages, profit, and rent · poverty and wealth · crafts, industry, and manufacture · capital, credit, and banking · fate, destiny, and necessity
Usually: argument (582) · detachment (314) · skepticism (231) · curiosity (127) · censure (77) · commentary or gloss (55) · letter or document (39) · indignation (36) · narrative (33) · exhortation (31)
“Anti-slavery is no longer a thing to be prevented. The time for prevention is past.” Frederick Douglass, My Bondage and My Freedom · precept
“One flash from the heart-supplied intellect of Harriet Beecher Stowe could light a million camp fires in front of the embattled host of slavery, which not all the waters of the Mississippi, mingled as they are with blood, could extinguish.” Frederick Douglass, My Bondage and My Freedom · vivid
“Law is defined to be a rule of action; but how can that be a rule, which is little known, and less fixed?” Alexander Hamilton; John Jay; James Madison, The Federalist Papers · insight
“Cheat! Oh! what a poor tongue is your tongue! what an awkward tongue!” Gotthold Ephraim Lessing, Minna Von Barnhelm · wit
“By the means of which measures, all commodities, Moveable, and Immoveable, are made to accompany a man, to all places of his resort, within and without the place of his ordinary residence; and the same passeth from Man to Man, within the Common-wealth; and goes round about, Nourishing (as it passeth) every part thereof;” Thomas Hobbes, Leviathan · vivid
“Nothing is more useful than water; but it will purchase scarce any thing; scarce any thing can be had in exchange for it. A diamond, on the contrary, has scarce any value in use; but a very great quantity of other goods may frequently be had in exchange for it.” Adam Smith, An Inquiry into the Nature and Causes of the Wealth · observation
“Labour therefore, is the real measure of the exchangeable value of all commodities.” Adam Smith, An Inquiry into the Nature and Causes of the Wealth · insight
“It is of none in buying and selling, the more common and ordinary transactions of human life.” Adam Smith, An Inquiry into the Nature and Causes of the Wealth · observation
“Silver would appear to be more invariable in its value than gold. Silver would appear to measure the value of gold, and gold would not appear to measure the value of silver.” Adam Smith, An Inquiry into the Nature and Causes of the Wealth · insight
“The money of any particular country is, at any particular time and place, more or less an accurate measure or value, according as the current coin is more or less exactly agreeable to its standard.” Adam Smith, An Inquiry into the Nature and Causes of the Wealth · insight
“If among a nation of hunters, for example, it usually costs twice the labour to kill a beaver which it does to kill a deer, one beaver should naturally exchange for or be worth two deer.” Adam Smith, An Inquiry into the Nature and Causes of the Wealth · vivid
“Labour, it must always be remembered, and not any particular commodity, or set of commodities, is the real measure of the value both of silver and of all other commodities.” Adam Smith, An Inquiry into the Nature and Causes of the Wealth · insight
He applies natural selection to comb architecture, arguing wax economy matters because bees must consume much honey to secrete wax, and selection could favor tighter, more regular cell patterns.
such case has been observed; nor would any good be derived from a single hexagon being built, as in its construction more materials would be required than for a cylinder. As natural selection acts only by the accumulation of slight modifications of structure or instinct, each profitable to the individual under its conditions of life, it may reasonably be asked, how a long and graduated succession of modified archite…
Du Bois describes Black Belt cotton share-tenancy and the merchant system, where tenants like Sam Scott receive supplies on credit secured by chattel and crop mortgages, leading merchants to control crops and deduct rent and bills.
or “cropping” was substituted for daily toil in gangs; and the slave gradually became a metayer, or tenant on shares, in name, but a laborer with indeterminate wages in fact. Still the price of cotton fell, and gradually the landlords deserted their plantations, and the reign of the merchant began. The merchant of the Black Belt is a curious institution,—part banker, part landlord, part banker, and part despot. His …
It distinguishes what must be eaten only before the LORD in the chosen place (tithes, firstborn, vows), but what may be eaten in cities when the chosen place is too far, still requiring blood to be poured out on the ground and discouraging worship of other gods.
Thou mayst not eat within thy gates the tithe of thy corn, of thy wine and of thy oil, either the firstborn of thine oxen or of thy sheep, neither any of thy vows which thou vowest, nor thy freewillofferings or heave offerings of thine hands: but thou must eat them before the LORD thy God, in the place which the LORD thy God hath chosen: both thou thy son and thy daughter, thy servant and thy maid and the Levite that…
To address wartime finances, the senate lets private creditors buy public land near Rome instead of immediate cash repayment; the land substitution is named Trientius and Tabulius from the creditors’ third-part loan repayment.
performed according to the direction of the decemvirs. The hymn was composed by Publius Licinius Tegula, as a similar one had been, in the memory of their fathers, by Livius. 13. All religious scruples were fully removed by expiations; at Locri, too, the affair of the sacrilege had been thoroughly investigated by Quintus Minucius, and the money replaced in the treasury out of the effects of the guilty. When the cons…
Herzl critiques economic misunderstandings used by anti-Semites, arguing technical progress and enterprise create wealth, and then frames the Jewish question as a modern national political problem to solve through international discussion.
those who are ignorant of the conditions of Jews in many countries of Eastern Europe would venture to assert that Jews are either unfit or unwilling to perform manual labor. But I do not wish to take up the cudgels for the Jews in this pamphlet. It would be useless. Everything rational and everything sentimental that can possibly be said in their defence has been said already. If one's hearers are incapable of compr…
Madison dismisses critics who misconstrue the slave import clause, then turns to the third class of federal powers regulating interstate and Indian commerce, coinage, weights and measures, naturalization, bankruptcy, judgments, and post offices.
a majority of the Union. Happy would it be for the unfortunate Africans, if an equal prospect lay before them of being redeemed from the oppressions of their European brethren! Attempts have been made to pervert this clause into an objection against the Constitution, by representing it on one side as a criminal toleration of an illicit practice, and on another as calculated to prevent voluntary and beneficial emigra…
Madison introduces the apportionment rule for House seats based on the same standard as direct taxes, arguing numbers best represent people’s rights though wealth-measures are imperfect.
To the People of the State of New York: The next view which I shall take of the House of Representatives relates to the appointment of its members to the several States which is to be determined by the same rule with that of direct taxes. It is not contended that the number of people in each State ought not to be the standard for regulating the proportion of those who are to represent the people of each State. The e…
He argues free interstate intercourse boosts exports, stabilizes trade when one crop fails, and makes U.S. commerce stronger than that of the thirteen states without union or only partial unions.
of naval protection to external or maritime commerce does not require a particular elucidation, no more than the conduciveness of that species of commerce to the prosperity of a navy. An unrestrained intercourse between the States themselves will advance the trade of each by an interchange of their respective productions, not only for the supply of reciprocal wants at home, but for exportation to foreign markets. Th…
He details how an unstable republic loses respect abroad, undermines liberty through changing and unreadable laws, advantages speculators over ordinary people, harms investment, and erodes popular attachment to government.
paid to the last. The federal Constitution avoids this error; and what merits particular notice, it provides for the last in a mode which increases the security for the first. Fourth. The mutability in the public councils arising from a rapid succession of new members, however qualified they may be, points out, in the strongest manner, the necessity of some stable institution in the government. Every new election in…
After the herald proclaims Cloanthus the winner, leaders receive ornate prizes while Mnestheus takes second; Sergesthus’ damaged galley limps in and he is rewarded.
his breadth of hand, Push’d on, and sped the galley to the land. Swift as a shaft, or winged wind, she flies, And, darting to the port, obtains the prize. The herald summons all, and then proclaims Cloanthus conqu’ror of the naval games. The prince with laurel crowns the victor’s head, And three fat steers are to his vessel led, The ship’s reward; with gen’rous wine beside, And sums of …
It continues the translator’s psychological critique of Muhammad’s sincerity and possible hallucinations, then presents Qur’anic narratives and commandments about Abraham’s disputes, charity without harm, and prohibitions on usury.
die!" Abraham said, "Since God bringeth the sun from the East, do thou, then, bring it from the West." The infidel was confounded; for God guideth not the evil doers: Or how he105 demeaned him who passed by a city which had been laid in ruins.106 "How," said he, "shall God give life to this city, after she hath been dead?" And God caused him to die for an hundred years, and then raised him to life. And God said, "Ho…
The passage treats charitable giving, vows, and signs of the poor as morally decisive, then condemns usury and sets rules about debts, repayment delay, and accountability before God on the day of return.
wisdom to whom He will: and he to whom wisdom is given, hath had much good given him; but none will bear it in mind, except the wise of heart. And whatever alms ye shall give, or whatever vow ye shall vow, of a truth God knoweth it: but they who act unjustly shall have no helpers. Give ye your alms openly?109 it is well. Do ye conceal them and give them to the poor? This, too, will be of advantage to you, and will d…
It condemns Jewish hostility, praises a righteous minority among the people of the Book, forbids intimate alliances with outsiders, and recounts campaigns at Bedr and angelic help to reassure believers.
They will never inflict on you but a trifling damage; and if they do battle with you, they shall turn their backs to you: then they shall not be succoured. Shame shall be stamped upon them36 wherever found, unless they ally them with God and men! And the wrath of God will they incur, and poverty shall be stamped upon them! This–for that they believed not in the signs of God, and slew the prophets unjustly: This–beca…
Equiano claims trade focuses on provisions, notes markets visited by “Oye-Eboe” men bringing firearms and goods while bartering for odoriferous woods and salt, and describes agriculture producing cotton and tobacco alongside constant labor and few beggars.
man is a sufficient architect for the purpose. The whole neighbourhood afford their unanimous assistance in building them and in return receive, and expect no other recompense than a feast. As we live in a country where nature is prodigal of her favours, our wants are few and easily supplied; of course we have few manufactures. They consist for the most part of calicoes, earthern ware, ornaments, and instruments of …
Equiano continues his economic case for abolition, linking African agriculture to British textile supplies, ends the narrative, and asks readers to suspend censure while framing his life as morally instructive.
The manufacturers of this country must and will, in the nature and reason of things, have a full and constant employ by supplying the African markets. Population, the bowels and surface of Africa, abound in valuable and useful returns; the hidden treasures of centuries will be brought to light and into circulation. Industry, enterprize, and mining, will have their full scope, proportionably as they civilize. In a wo…
Washington describes fundraising meetings in New York and other cities, then outlines his two rules for securing philanthropic support and argues that calm self-control and personal self-forgetfulness matter.
upon this advice; and it might be made to apply to all public speaking. From that time to the present I have always tried to keep his advice in mind. Meetings were held in New York, Brooklyn, Boston, Philadelphia, and other large cities, and at all of these meetings General Armstrong pleaded, together with myself, for help, not for Hampton, but for Tuskegee. At these meetings an especial effort was made to secure he…
Washington argues that Black political rights should grow slowly through property, intelligence, and character, endorsing voting but discouraging seeking ballot advice only from white men, and rejecting voting laws that bar poor Black men while allowing poor white men.
will, there is something in human nature which we cannot blot out, which makes one man, in the end, recognize and reward merit in another, regardless of colour or race. I believe it is the duty of the Negro—as the greater part of the race is already doing—to deport himself modestly in regard to political claims, depending upon the slow but sure influences that proceed from the possession of property, intelligence, a…
Du Bois reframes the ‘Negro problem’ as a modern economic and ethical problem of distributing the world’s goods, arguing that hunger drives hatred and that race categories are inadequate for explaining conflict.
to solve. We could bring to its unraveling little of the scholarly aloofness and academic calm of most white universities. To us this thing was Life and Hope and Death! How should we think such a problem through, not simply as Negroes, but as men and women of a new century, helping to build a new world? And first of all, here is no simple question of race antagonism. There are no races, in the sense of great, separa…
Using US census figures, Du Bois documents high illiteracy and school nonattendance—especially among Black children—then argues the root problem is underfunded education and urges spending enough to educate every child, calling education the true “immortality.”
in the broadest, highest way. They must fill the colleges with the talented and fill the fields and shops with the intelligent. Wisdom is the principal thing. Therefore, get wisdom. But why am I talking simply of "colored" children? Is not the problem of their education simply an intensification of the problem of educating all children? Look at our plight in the United States, nearly 150 years after the establishmen…
He concludes that the anti-slavery movement has become a major moral and social issue in America, strengthened by influential writers and international opinion, and likely to succeed unless it decays from within.
when the claims of justice and mercy make their demand at the door of human selfishness. Nevertheless, there is that within which ever pleads for the right and the just. In conclusion, I have taken a sober view of the present anti-slavery movement. I am sober, but not hopeless. There is no denying, for it is everywhere admitted, that the anti-slavery question is the great moral and social question now before the Ame…
Plutarch continues the comparison, describing Numa’s extremely democratic government with tradesmen and musicians, Lycurgus’s aristocratic restriction of crafts to servants, and their different approaches to wealth and communal life.
be guilty of injustice; nor did Lycurgus promote a spirit of war in his people that they might do injustice to others, but that they might protect themselves by it. In bringing the habits they formed in their people to a just and happy mean, mitigating them where they exceeded, and strengthening them where they were deficient, both were compelled to make great innovations. The frame of government which Numa formed …
Themistocles persuades Athenians to stop distributing Laurium silver and instead build ships to fight Aeginetans, shifting Athens toward maritime power to resist Persians later.
conflicts, and for these, to the benefit of all Greece, he kept himself in continual readiness, and his city also in proper training, foreseeing from far before what would happen. And, first of all, the Athenians being accustomed to divide amongst themselves the revenue proceeding from the silver mines at Laurium, he was the only man that dared propose to the people that this distribution should cease, and that with…
Thebes sends Pelopidas to the Persian king Artaxerxes, where he gains presents and privileges for Greek freedom and the restoration of Messenia, outperforming Athenian diplomats who are punished for greed.
Epaminondas refused to admit such a man as an ally to the Thebans, but granted him a truce of thirty days, and, Pelopidas and Ismenias being delivered up, returned home. Now the Thebans, understanding that the Spartans and Athenians had sent an embassy to the Persians for assistance, themselves, likewise, sent Pelopidas; an excellent design to increase his glory, no man having ever before passed through the dominion…
A grateful story compares Lycurgus and Xenocrates to Titus’s beneficence: he accepts redeemed Roman captives from the Achaeans and presents them in his procession; Plutarch also lists the gold, silver, coined sums, and conditions involving Philip’s owed money.
he did, namely, that he put an end to the war only when he foresaw that the tyrant's destruction must have been attended with the ruin of the other Spartans. The Achaeans, by various decrees, did much to show Titus honor: none of these returns, however, seemed to come up to the height of the actions that merited them, unless it were one present they made him, which affected and pleased him beyond all the rest; whic…
As general, Cimon campaigns in Thrace against Persians at Eion on the Strymon: he defeats those holding Eion, drives out surrounding Thracians, receives the town after its leader burns himself, and then establishes Mercuries with inscriptions praising endurance and valor.
as soon as he came to Sparta, he should speedily be freed from all evils; obscurely foretelling, it would seem, his imminent death. This story is related by many authors. Cimon, strengthened with the accession of the allies, went as general into Thrace. For he was told that some great men among the Persians, of the king's kindred, being in possession of Eion, a city situated upon the river Strymon, infested the nei…
Pompey and Lucullus clash over authority in Galatia, trade accusations of avarice and ambition, and Pompey counteracts Lucullus’s settlements and orders while announcing a renewed war under Mithridates.
it anything else, well knowing that his enmity with Lucullus, setting a flame just now to his natural passion for glory and empire, made him feel more than usually gratified. As indeed appeared not long afterwards by his actions, which clearly unmasked him; for in the first place, he sent out his proclamations into all quarters, commanding the soldiers to join him, and summoned all the tributary kings and princes wi…
Cicero is shown balancing ambition and prudence: he delays his pursuit of glory after an incident in Campania, argues that statesmen must know people like craftsmen know tools, and prosecutes Verres successfully through evidence and sharp wit.
was always excessively pleased with his own praise, and continued to the very last to be passionately fond of glory; which often interfered with the prosecution of his wisest resolutions. On beginning to apply himself more resolutely to public business, he remarked it as an unreasonable and absurd thing that artificers, using vessels and instruments inanimate, should know the name, place, and use of every one of the…
Locke argues that labour creates most land value by turning raw nature into wheat and bread, and he lists many indirect contributions from workers, materials, and tools along the production chain.
To return to the argument in hand. Sect. 43. An acre of land, that bears here twenty bushels of wheat, and another in America, which, with the same husbandry, would do the like, are, without doubt, of the same natural intrinsic value: but yet the benefit mankind receives from the one in a year, is worth 5l. and from the other possibly not worth a penny, if all the profit an Indian received from it were to be valued,…
Paine explains currency inflation as too much money chasing goods, illustrating how raising prices reduces stored wealth, and argues only reducing the money supply can restore value and prosperity.
observations on the state of our currency, so as to make the support of it go hand in hand with the suppression of disaffection and the encouragement of public spirit. The thing which first presents itself in inspecting the state of the currency, is, that we have too much of it, and that there is a necessity of reducing the quantity, in order to increase the value. Men are daily growing poor by the very means that t…
Paine compares French and English money supplies using reports from M. Necker and George Chalmers, arguing France’s circulation is far larger than England’s and that England’s funding system substitutes paper for specie.
pound sterling; for M. Neckar's statement, from which Mr. Burke's is taken, is two thousand two hundred millions of livres, which is upwards of ninety-one millions and a half sterling. M. Neckar in France, and Mr. George Chalmers at the Office of Trade and Plantation in England, of which Lord Hawkesbury is president, published nearly about the same time (1786) an account of the quantity of money in each nation, from…
Paine explains that Necker uses Lisbon and Cadiz records of gold and silver imports from South America to estimate Europe’s money inflow, arguing England’s share is too small versus its commerce.
the only basis whereon to estimate the quantity of money (gold and silver) which ought to be in every nation in Europe, to preserve a relative proportion with other nations. Lisbon and Cadiz are the two ports into which (money) gold and silver from South America are imported, and which afterwards divide and spread themselves over Europe by means of commerce, and increase the quantity of money in all parts of Europe.…
Paine rejects the idea that exports and the “balance of trade” truly enrich a nation, claiming merchants on both sides profit from exchange, while navies and dominion absorb gains.
as an export; and, according to the custom-house balance, the losses at sea, and by foreign failures, are all reckoned on the side of profit because they appear as exports. Secondly, Because the importation by the smuggling trade does not appear on the custom-house books, to arrange against the exports. No balance, therefore, as applying to superior advantages, can be drawn from these documents; and if we examine t…
Sancho insists his county will still be safe despite not finding the giant’s head, while the landlord rages and curses the damage to wine skins and unpaid charges.
not finding this head my county will melt away like salt in water;”—for Sancho awake was worse than his master asleep, so much had his master’s promises addled his wits. The landlord was beside himself at the coolness of the squire and the mischievous doings of the master, and swore it should not be like the last time when they went without paying; and that their privileges of chivalry should not hold good this time…
Ricardo introduces his political economy by arguing that earth’s produce is divided among land proprietors, capital owners, and laborers, and that rent’s natural laws—developed by Malthus and others—are essential for understanding wages, profits, and taxation.
Distributed Proofreading Team at https://www.pgdp.net (This file was produced from images generously made available by the Posner Memorial Collection (http://posner.library.cmu.edu/Posner/)) +---------------------------------------------------+ | Transcriber's note: | | Corrections in the ERRATA section have been made | | and duplicate Chapter numbers are marked by | | as…
Ricardo begins Chapter I by defining “value” as exchangeable rather than merely useful, and argues that commodities’ exchange value comes from scarcity and labor, especially for goods producible by labor and competition.
of these commodities, or the rule which determines how much of one shall be given in exchange for another, depends solely on the comparative quantity of labour expended on each. "The real price of every thing," says Adam Smith, "what every thing really costs to the man who wants to acquire it, is the toil and trouble of acquiring it. What every thing is really worth to the man who has acquired it, and who wants to d…
He argues against using labor-purchasing power (corn or labor as a “standard”) as a stable measure, claiming corn, labor, and gold all fluctuate with agriculture, trade restrictions, population, and wages.
such as gold and silver, for the purpose of determining the varying value of other things, has himself, by fixing on corn or labour, chosen a medium no less variable. Gold and silver are no doubt subject to fluctuations, from the discovery of new and more abundant mines; but such discoveries are rare, and their effects, though powerful, are limited to periods of comparatively short duration. They are subject also to…
Ricardo refines the labor theory by insisting relative exchange depends on the comparative quantity of labor needed to produce commodities, not on how much labor (or goods) the commodity purchases in exchange.
in the manufacture of which no such improvement were made, had sustained a very considerable reduction; and though they were the produce of a very considerably diminished quantity of labour. It cannot then be correct, to say with Adam Smith, "that as labour may sometimes *purchase* a greater, and sometimes a smaller quantity of goods, it is their value which varies, not that of the labour which purchases them;" and …
He discusses labor as the foundation of value while admitting differences in skill and intensity, then claims those differences are largely stabilized in markets and matter less for comparing the same commodity across time.
four pieces of linen, we may safely conclude, that either more labour is required to make the cloth, or less to make the linen, or that both causes have operated. As the inquiry to which I wish to draw the reader's attention, relates to the effect of the variations in the relative value of commodities, and not in their absolute value, it will be of little importance to examine into the comparative degree of estimati…
Ricardo extends the idea to capital and tools, arguing that relative value reflects total labor embodied not only in immediate production but also in forming the implements and capital used.
its mark; one beaver would naturally be of more value than two deer, and precisely for this reason, that more labour would on the whole be necessary to its destruction. All the implements necessary to kill the beaver and deer might belong to one class of men, and the labour employed in their destruction might be furnished by another class; still, their comparative prices would be in proportion to the actual labour b…
Using examples of shoemakers, steam-engines, and hunter versus fisherman, he classifies capital as fixed or circulating and explains how differences in durability and value affect profits and commodity price fluctuations.
same consideration of the various quantities of labour which have been bestowed on those other things, will equally govern the portion of them which will be given for the stockings. To convince ourselves that this is the real foundation of exchangeable value, let us suppose any improvement to be made in the means of abridging labour in any one of the various processes through which the raw cotton must pass, before t…
He argues that when hunting and fishing use equal-valued, equally durable implements and equal labor, relative values are determined solely by labor-time outputs, while wages/profits move together without changing exchange ratios.
they are also subject to fluctuations from a rise of wages, and consequent fall of profits, if the fixed capitals employed be either of unequal value, or of unequal duration. Suppose that in the early stages of society, the bows and arrows of the hunter were of equal value, and of equal durability, with the canoe and implements of the fisherman, both being the produce of the same quantity of labour. Under such circu…
Ricardo treats money as a putative standard but shows that if a commodity’s relative value shifts, it must be due to differing labor required in production, not merely wage changes, which affect both trades similarly.
how much of the variation was to be attributed to a cause which affected the value of fish, and how much to a cause which affected the value of game. Suppose money to be that commodity. If a salmon were worth 1*l.* and a deer 2*l.* one deer would be worth two salmon. But a deer might become of the value of three salmon, for more labour might be required to obtain the deer, or less to get the salmon, or both these ca…
Ricardo argues that changes in relative value come from the amount of labor needed for production, using examples where increased fish output lowers fish’s value relative to gold or game despite wage changes.
continue unaltered. Wages might rise twenty per cent., and profits consequently fall in a greater or less proportion, without occasioning the least alteration in the relative value of these commodities. Now suppose, that with the same labour and fixed capital, more fish could be produced, but no more gold or game, the relative value of fish would fall in comparison with gold or game. If, instead of twenty salmon, tw…
He continues by showing that when wages rise, commodities produced with more circulating capital rise relatively in value versus those using more fixed capital, and he provides numerical comparisons for hunter and fisherman cases.
To replace his circulating capital of 53*l.* with a profit of 4 per cent. 55.12*l.* To replace fixed capital, annually wasted, the present value of an annuity of 18.49*l.* for ten years, when money is at 4 per cent., being 150*l.* 18.49 ----- £73.61 The fisherman would sell his fish …
Ricardo analyzes how the durability of fixed capital affects how wages and profit changes translate into commodity prices, arguing longer-lived machinery causes larger price drops when profits fall.
labour so rose, that 21,153*l.* were required, profits would fall to 4 per cent. and if it rose, so that 21,359*l.* was employed, profits would fall to 3 per cent. But, as no wages would be paid by the owner of the machine, which would last 100 years, when profits fell to 5 per cent. the price of his goods must fall to 1007*l.* 13*s.* 8*d.* viz. 1000*l.* to pay his profits, and 7*l.* 13*s.* 8*d.* to accumulate for 1…
He addresses received doctrines by arguing that when wages rise, competitive pressure prevents machinery prices from staying higher and instead machinery lowers the prices of durable goods compared with wages-only production.
its received doctrines, which maintain that every rise in wages is necessarily transferred to the price of commodities, that it may not be superfluous to elucidate the subject still further. A manufacturer of hats employs a hundred men at an annual expense of 50*l.* each, who produce him commodities of the value of 8000*l.* A machine calculated to last precisely a year, and to do equally well the same work as the 10…
Ricardo summarizes that rising wages need not raise prices in real terms if money’s value is fixed; he distinguishes wage increases driven by money’s fall from those due to real scarcity, affecting profits differently.
of the commodity manufactured. Neither machines nor any other commodities are raised in price, but all commodities which are made by machines fall, and fall in proportion to their durability. It appears, then, that in proportion to the quantity and the durability of the fixed capital employed in any kind of production, the relative prices of those commodities on which such capital is employed, will vary inversely as…
He argues that the true distribution of rent, wages, and profits depends on the quantity of labor required, not absolute output or nominal value in money or commodities, even if total production doubles.
that we are to judge of rent, profit, and wages, and not according to the value at which that produce may be estimated in a medium which is confessedly variable. It is not by the absolute quantity of produce obtained by either class, that we can correctly judge of the rate of profit, rent, and wages, but by the quantity of labour required to obtain that produce. By improvements in machinery and agriculture, the whol…
Ricardo continues that changes in the value of money may alter prices but not the rate of profit, because capital and product prices move with money proportionally, while profits depend on relative proportions.
value, he double the quantity of produce, its value falls one half, and then it will bear the same proportion to the capital which produced it, as it did before. If at the same time that he doubles the quantity of produce by the employment of the same capital, the value of money is by any accident lowered one half, the produce will sell for twice the money value that it did before; but the capital employed to produc…
He continues the three-land example, showing that once worse land is required rent begins on better land, and that advances in productivity on existing land can still create additional rent via the difference between equal capitals.
oblige a country to have recourse to land of a worse quality, to enable it to raise its supply of food, rent, on all the more fertile land, will rise. Thus suppose land--No. 1, 2, 3,--to yield, with an equal employment of capital and labour, a net produce of 100, 90, and 80 quarters of corn. In a new country, where there is an abundance of fertile land compared with the population, and where therefore it is only nec…
Ricardo explains rent as rising only when additional capital yields diminishing returns on land, so later capital pays no rent and rent comes from the gap between outputs.
original tenant refused, some other person would be found willing to give all which exceeded that rate of profit to the owner of the land from which he derived it. In this case, as well as in the other, the capital last employed pays no rent. For the greater productive powers of the first 1000*l.*, fifteen quarters is paid for rent, for the employment of the second 1000*l.* no rent whatever is paid. If a third 1000*…
He argues that corn’s value is regulated by the labour needed on the least-rent-paying land, so rent is paid because corn is high, not the other way round.
usual and general rate of profits on stock; and that could only happen when his commodity sold for a price proportioned to the quantity of labour bestowed on its production.[6] It is true, that on the best land, the same produce would still be obtained with the same labour as before, but its value would be enhanced in consequence of the diminished returns obtained by those who employed fresh labour and stock on the …
Ricardo extends his rent principle to mines, asserting metals’ value depends on total labour to extract and transport, with rent as the consequence of higher returns.
ON THE RENT OF MINES. The metals, like other things, are obtained by labour. Nature, indeed, produces them; but it is the labour of man which extracts them from the bowels of the earth, and prepares them for our service. Mines, as well as land, generally pay a rent to their owner; and this rent, as well as the rent of land, is the effect, and never the cause of the high value of their produce. If there were abunda…
He defines natural versus market price, arguing market prices fluctuate around natural prices as profits change and capital shifts across employments to equalize returns.
ON NATURAL AND MARKET PRICE. In making labour the foundation of the value of commodities, and the comparative quantity of labour which is necessary to their production, the rule which determines the respective quantities of goods which shall be given in exchange for each other, we must not be supposed to deny the accidental and temporary deviations of the actual or market price of commodities from this, their primar…
Using a fashion example, Ricardo says competition prevents sustained market prices from straying far from natural prices by transferring capital and labour toward the higher-demand good.
cent. either these profits would be temporary, and would soon again fall back to their usual station, or the profits of the others would be elevated in the same proportion. Let us suppose that all commodities are at their natural price, and consequently that the profits of capital in all employments are exactly at the same rate, or differ only so much as, in the estimation of the parties, is equivalent to any real o…
He claims wages tend to fall with rising labour supply when demand lags, but in practice commodity prices rise with the cost of subsistence, so money wages rise though real wages may not, reducing profits.
regulated only by the supply and demand of labourers; but we must not forget, that wages are also regulated by the prices of the commodities on which they are expended. As population increases, these necessaries will be constantly rising in price, because more labour will be necessary to produce them. If, then, the money wages of labour should fall, whilst every commodity on which the wages of labour were expended r…
Using a numerical example, Ricardo argues that when wheat prices rise, labourers receive higher money wages but reduced corn wages, making workers worse off in real terms while profits and rental shares shift.
When at 4*l.* 10*s.*, three quarters of wheat would cost £13.10 and other things 12 ----- 25.10 When at 4*l.* 16*s.*, three qrs. of wheat £14.8 Other things 12 ---- 26.8 When at 5.2.10*l.* three quarters of wheat would cost £15.8.6. Other things 12 …
Ricardo argues that wage rises do not raise general commodity prices because the relative value of money adjusts through trade in gold (whether domestically produced or imported), and paper money must track gold.
of the argument, because it may be shewn, that whether it were found at home, or were imported from abroad, the effects ultimately and indeed immediately would be the same. When wages rise, it is generally because the increase of wealth and capital have occasioned a new demand for labour, which will infallibly be attended with an increased production of commodities. To circulate these additional commodities, even at…
Transitioning to profits, Ricardo argues that changes in corn prices tied to labour difficulty raise wages and therefore reduce profits, using the distribution of output between wages, rents, and profits to explain persistent profit variation.
ON PROFITS. The profits of stock in different employments, having been shewn to bear a proportion to each other, and to have a tendency to vary all in the same degree and in the same direction, it remains for us to consider what is the cause of the permanent variations in the rate of profit, and the consequent permanent alterations in the rate of interest. We have seen that the price[10] of corn is regulated by the…
Ricardo argues that as the price of corn rises and wages rise, farmers retain the same total money value for their output after rent, so rent absorbs the increase and profits don’t rise.
I think it is clearly demonstrated that a rise in the price of corn, which increases the money wages of the labourer, diminishes the money value of the farmer's profits. But the case of the farmer of the old and better land will be in no way different; he also will have increased wages to pay, and will never retain more of the value of the produce, however high may be its price, than 720*l.* to be divided between hi…