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The central themes that emerge out of David Ricardo's On the Principles of Political Economy, and Taxation.
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The central themes that emerge out of David Ricardo's On the Principles of Political Economy, and Taxation are the relationship between real wages and the general rate of profits, and the relation between income distribution and natural prices. Ricardo maintains that real wages have an inverse relationship to the general rate of profits in an economy. Before he delves into a detailed explanation of this relationship in the chapter on 'Profits' he refers to profit rates as a function of the quantity of labour employed in the production process in earlier chapters on 'Value'. Ricardo's argument leads to the notion that the rate of profit depends on the relative value of goods, which in turn depend on the proportion of fixed to variable capital employed and the wages accorded to them. According to Ricardo, goods produced differ in value (amongst other things) on account of the different quantities of fixed capital to labour...
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