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Show OF THE PROFITS OF CAPIT.AL. [ CH. V. must lead to the n1ost erroneous conclusions. Adam Smith, in stating the cause of the fall of profits, has otnitted this point, and in so doing has omitted a most important consideration ; but in dwelling solely upon the abundance and competi ... tion of capital, he is practically much nearer the truth,* than those who dwell ahnost exclusively on the quality of the last land taken into cui .. tivation. SECTION IV. RemaTks on Mr. Ricardo's 'J'lteory of Prcifits. According to Mr. Ricardo, profits are regulated by wages, and wages by the quality of the last land taken into cultivation. This theory of profits depends entirely upon the circun1stance of the mass of comrnodities remaining at the same price, while money continues of the same value, whatever may be the variations in the price of labour. This unifortnity in the value of wages and profits taken together is indeed assu1ned by Mr. Ricardo in all his calculations, fron1 one end of his work to the other; and if it were true, * Perhaps it ought to be aliowed that Adam Smith, in speaking of the effects of accumulation and competition on profits, natu~ ally means to refer to a limited territory, a limited populatiOn, and a limited demand; but accumulation of capital under these circumstances involves every cause that can affect profits. SiC. IV.] g~· 'I' HE PROFITS OF C.API'f AL. 327 we should certainly have an accurate rule which ,vould determine the rate of profits upon any given rise or fall of tnoney wages. But if it be not true, the 'vhole theory falls to the ground. We can infer nothing respecting the rate of profits from a rise of money wages, if commodities, instead of remaining of the same price, are very variously affected, some rising, some falling, and a very stnall number indeed remaining stationary. But it was she\Vn in a former chapter* that this must necessarily take place upon a rise in the price of labour. Consequently the money 'vages of labour cannot regulate the rate of profits. This conclusion will appear still tnore strikingly true, if we adopt that supposition respecting the mode of procuring the precious n1etals which 'vould certainly n1aintain them tnost strictly of the same value, that is, if we suppose then1 to be procured by a uniform quantity of unassisted labour \Vithout any advapces in the shape of capital beyond the necessaries of a single day. That the precious metals \Vould in this case retain, n1ore completely than in any other, the same value, cannot be denied, as they 'vou lcl both cost and cotnnland the same quantity of labour. But in this case, as was before stated, the n1oney price of labour could never pern1anently rise. We cannot however for a tnornent itnagine that this impossibility of a rise or fall in the tnoney price of labour could in any respect i1npede or interrupt the '* Chap. ii. sects. 4 and .5. y ~~ • |
