ABSTRACT
The wage w will have reached its maximum in a certain standard if profits, that is to say r, vanish, i.e. if the entire social product is distributed to the workers:
We then have p/w=L; i.e. prices in terms of the wage rate are equal to labour values. If the wage is lowered, profits rise up to a maximum rate of profit R at which the wage disappears completely. This maximum rate of profit is obviously independent of the standard chosen and (this constitutes one of Sraffa’s important discoveries) it is finite, if there exist produced means of production. The maximum rate of profit is a solution to the equation
Clearly, the system obtained at the maximum rate of profit is analogous to that obtained at the end of section I.4 on the assumption that the wage is included among the means of production in the form of the necessary consumption goods of the workers. In between, w and r are functionally related. It is reasonable to supposeand can be proved rigorously-that (if there is no joint production) r rises monotonically in every standard if w diminishes (see Figure I.1).
