Principles of Political Economy and Taxation. 183 



it is manifest, that there is nothing to disturb the equilibrium, 

 whatever be the amount of this loss in either case. 



It will be seen however, that the result which Mr. Ricardo 

 appears to have inferred, viz. that the whole tax in each case 

 would be taken from profits, cannot possibly be true. For in 

 such a case it would differently affect profits in different employ- 

 ments, according to the proportion of fixed capital: and hence 

 some succeeding adjustment must necessarily take place, in order 

 to bring back profits to an equality. 



1. Let it be supposed that profits are unaltered by the tax. 



Therefore 



(1 + 7) u 



7 =7, 1+# = 1 + 



1+7 + 7??*' 



x _ (l+y)u (1+7)" _ 



1+y+ym' I+7 + 7/11' 



Also /(l +*) + (l -/) (l+£) + «(l + «) = ! +*, 



gives t={\-t)u-fx-{\-f)l 



Ji- t - ^ 1+ v) -iWKl+7)) 



I l+ 7 0»+l) l+70i + l)j 



whence u is known. 



If, as an extreme case, we suppose no fixed capital in agri- 

 culture, and no circulating capital in manufactures, m = 0, i»=oo, 

 whence 



t 



x = u, 1 = 0. fu-\-t+ tu = u, u = 



\-t-r 



If * = jq» /=;, we have u = -. A tax of — on wages would 



raise the price of agricultural produce £, while manufactures re- 

 mained unaltered ; and would raise wages in the same proportion. 



