ABSTRACT
It is well known that Ricardo considers a closed economy with uniform rates of wages and profits and asks what determines the distribution of the produce between the classes. His method is based on taking the conditions of production and the level of accumulation as given. This determines the level of employment and hence the magnitude of the total product. If the necessary wage of the employed is deducted from the total product, there remains a surplus for distribution between two classescapitalists and landlords-which depends on the conditions prevailing in agriculture. A larger differential in productivity between the best land and the worst still cultivated implies a larger share of rent and therefore a lower share of profits. The uniform rate of profit must fall as the margin of cultivation is pushed out further; in the simplest case no rent is paid on the last land so that lesser productivity at a given wage implies lower profits and an increased outlay per unit of produce.
