Principles of Political Economy and Taxation. 173 



and the three fractions of the whole are y., -^, —v. The whole 



o 3o 3d 



being 180, these are 30, 95, 55 as in Mr. Ricardo's example. Also 

 the price is -y, where /» = £4: whence the money value is easily 

 calculated. 



Since the sums paid as wages and the rate of wages differ 

 at the two periods, the capital employed will differ. If, how- 

 ever, we suppose the value of the capital the same at the two 



periods, the rate of profit is altered in the proportion — — ^~~ 



If the capital be supposed to be agricultural produce and con- 

 sequently its value to partake of the increase of prices, profits 



would be diminished in the proportion . ,. ,, — r. Compare 



r * (w — 1) (1 + x) ~ 



Ricardo, p. 116. 



PRICES. 



11. In the above example, Art. 9, the price of corn is sup- 

 posed to depend entirely on the labour directly employed to 

 produce it. This is Mr. Ricardo's mode of treating the sub- 

 ject. It is, however, somewhat inaccurate according to his own 

 principles : for in applying the postulate of price, we are to take 

 into account the capital employed as well as the labour. 



In consequence of this consideration, the prices of commodities 

 will be effected by the proportion and durability of fixed capital 

 requisite for their production. Mr. Ricardo has several propo- 

 sitions on this subject which may be included in the following 

 formulae. 



Let I be the number of labourers who this year work by 

 means of a machine or any other kind of fixed capital: /' the 

 number of labourers who were employed last year in making 



