ABSTRACT
This essay is concerned with the early account (1813–15) provided by Ricardo of the principles governing the general rate of profit, the characteristic feature of which is defined in the celebrated proposition that ‘it is the profits of the farmer which regulate the profits of all other trades’. I shall attempt to justify the contention that the widely held explanatory hypothesis suggested by Piero Sraffa (cf. 1951, xxxi–xxxii) – according to which Ricardo's proposition derives from the assumption that in agriculture both input and output consist of the same commodity (‘corn’) – does not in fact accurately reflect Ricardo's intentions. It follows from the argument of this paper that substantially the same position as that ultimately appearing in the Principles was maintained from the very outset, namely that variations in the money-wage rate, in consequence of changing prices of wage goods, will be accompanied by inverse movements in the general rate of profit. We consider below the correspondence between Ricardo and Malthus on the rate of profit during the period 1813–14, and the Essay on Profits (1815).
