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Show .. ON THE NATURE AND [ CH. II substance said. In the particular case which he has -taken to illustrate his proposition, he supposes no other labour en1ployed than that whic~ has been ·applied in .the construction of the m~clune, or fixed -capitaLused; and cDnsequently the pnce of the year- -ly produce of this n1achine \VOu1d be formed_ n1e~·elf' ·.of the ordinary p11ofits of the £20,000 which It IS supposed to have cost, together with a sl~g~t ad?ition to replace its wear and tear. Now 1t ts qu1t_e certain that if, fron1 any cause \vhatever, the ·orchnary profits of stock should fall,.the p1:1c._e of th~ con1- modity so produced \vould fall. This IS suffic1en~ly .obvious. But the effects arising from an oppos1te supposition: equally consistent with fact_s, have not been sufficiently considered by lVIr. Ricardo, and the rreneral result has been totally overlooked. · The state ot the case, in a general vie'v of it, seen1-s to be this. There is a very large class of con1modi ties, in the production of,vhich, ovving to the quantity of fixed capital used and the long tin1e that elapses before the returns of the capital, \vhether fixed or circulating, oorne in, the proportion which .the value of the capital bears to the value of the ·Jabour\vhich it yearly employs is, in va~·ious degrees, v.ery ,considerable. In all these cases it is natural to ·suppose, that the fall of price arising from a fall of . pl~ofits should, in. various degrees, n1ore than counterbalance the rise of price which would naturally be occasioned by a rise in the price of labour; and consequently on .the supposition ·of a rise in the money price of labour and a fall . in the rate of profits, all_ these commodities will, in various degrees, naturally fal1 in price. .. SEC. IV.] :MEASURES ·oF VALUE. 93 On the other hand, there is a large class of commodities, where, fron1 the 'absence of fixed capital and the rapidity of the returns of the circulating capital from a: day to a year, the ·proportion which the value of the capital bears to the quantity of labour which it employs is very small. A capital 'of a hundred pounds, which was returned every 'veek, could employ as n1uch labour annually as 2,600/. the returns of vvhich came in only at the ·end of the year; and if the capital were returned nearly every day, as it is practically, in sotne few cases, the advance of little 1nore than the wages ·of a n1an for a single day n1ight pay above 300 days' labour in the course of a year. N O\V it is quite evident, that out of the profits of these trifling capitals it 'vou1d not only be absolutely in1- possible ·to take a rise in the price of labour of ' · seven per cent., but it would be as in1possible to take a rise of ~ per cent. On the first supposition, a rise of only k per cent. would, if the price )f the produce continued the san1e, absorb n1ore than all the profits of the 1 OOl.; and in the other case rr1uch more than all the capital advanced. If: therefore, the prices of cotnrnoditics, where the ~roportion of labour is very great con1pared "\Vith the capital 'vhich en1ploys it, do not rise l!pon an advanc~ in the price of labour, the production· of ~uch cotnn1odities must· at once be given up. But they certainly will not be given up. Consequently upon a rise in the price of labour and fall of profits, there will be a large class of · coininodities \vhich will rise in p·rice ; and it cannot · be correct |