[OPE-L:6392] Re: Re: Two Rates of Profit?

Ajit Sinha (ecas@cc.newcastle.edu.au)
Wed, 01 Apr 1998 18:43:37 +1000

At 12:41 30/03/98 -0500, Fred mosely wrote:
Ricardo had assumed, without examination
>or justification, that commodities would sell at prices which
>approximated their values and which would at the same time
>yield equal rates of profit. Ricardo never explained
>theoretically how individual prices that yield equal rates of
>profit are different from their values.

I don't know where Fred gets these ideas from. The diversion of natural
prices from value ratios has been admitted by Ricardo in the very
beginning. And it is known as the first modification of the labor theory of
value. As a matter of fact if commodities exchanged according to their
value ratios, then a change in the wage rate will have no impact on the
relative prices of the commodities, and so Ricardo's perennial problem
would not even arise. The problem of the 'invariable measure of value'
arises simply because equalization of the rate of profit implies that the
labor theory of value cannot be strictly valid. Cheers, ajit sinha