ABSTRACT
Some thirty years ago, George Stigler published what was to become a standard reference for students of the classical period – ‘The Ricardian Theory of Value and Distribution’. A key feature of the theoretical system developed in the Principles of Political Economy is there said to be the subsistence wage theory, which (together with the measure of value) was added to those elements already present in the earlier Essay on Profits, namely, the theory of rent and the dominant influence of diminishing returns in agriculture upon the rate of profit (1965a, 187). From these elements there followed the ‘great conclusion’ of the model: ‘With the growth of population, the rate of wages rises’ (reflecting the increasing real cost of producing the given basket), ‘the rate of profit falls, and aggregate rents rise – all in terms of the measure of value’ (190).
