‘PROFITS DEPEND ON WAGES’: RICARDO'S PRINCIPLE AND ITS EARLY DEMISE

Giancarlo de Vivo

Contributions to Political Economy, 2018, vol. 37, issue 1, 89-104

Abstract: The present paper deals with one of the most important principles of Ricardo's theory: namely, the idea that profits ‘depend on wages’ and only on wages, varying inversely with them. After an examination of the actual contents of this principle in Ricardo, and its relationship with his theory of value, we discuss first the dispute about the principle between Ricardo and Malthus, then its progressive abandonment by Ricardo's self-appointed ‘genuine disciples’, J.R. McCulloch and James Mill, under the influence of Torrens and of Bailey. We argue that de Quincey is the only Ricardian to steadfastly keep to Ricardo's principle.

Date: 2018
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