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But a tax on luxuries would no other effect than to raise their price. It would fall wholly on the consumer, and could neither increase wages nor lower profits.

David Ricardo

Every transaction in commerce is an independent transaction.
DAVID RICARDO

Commerce Independent Transaction
As the revenue of the farmer is realized in raw produce, or in the value of raw produce, he is interested, as well as the landlord, in its high exchangeable value, but a low price of produce may be compensated to him by a great additional quantity.
DAVID RICARDO

Additional exchange Farmer Production Quantity Revenue Value
The wheat bought by a farmer to sow is comparatively a fixed capital to the wheat purchased by a baker to make into loaves.
DAVID RICARDO

Capital Farmer Purchase
Like all other contracts, wages should be left to the fair and free competition of themarket, and should never be controlled by the interference of the legislature.
DAVID RICARDO

Competition Contract Control Freedom Legislature Wage
Utility then is not the measure of exchangeable value, although it is absolutely essential to it.
DAVID RICARDO

Essential exchange Measurement Value
But it is clear that the price of labour has no necessary connection with the price of food, since it depends entirely on the supply of labourers compared with the demand.
DAVID RICARDO

Clear Compare Connection Demand Labor Necessary Price
Gold and silver are no doubt subject to fluctuations, from the discovery of new and more abundant mines; but such discoveries are rare, and their effects, though powerful, are limited to periods of comparatively short duration.
DAVID RICARDO

Discover Doubt Fluctuation Gold Limitation Powerful Rare Silver Subject
During the period of capital moving from one employment to another, the profits on that to which capital is flowing will be relatively high, but will continue so no longer than till the requisite capital is obtained.
DAVID RICARDO

Capital Employment Flow Move Relative
A rise in wages, from an alteration in the value of money, produces a general effect on price, and for that reason it produces no real effect whatever on profits.
DAVID RICARDO

Money Production Profit Real Rise Value
There can be no greater error then in supposing that capital is increased by non-consumption.
DAVID RICARDO

Consumption Errors Greatness Increase
Profits might also increase, because improvements might take place in agriculture, or in the implements of husbandry, which would augment the produce with the same cost of production.
DAVID RICARDO

Agriculture Husband Improvement Profit
If then the prosperity of the commercial classes, will most certainly lead to accumulation of capital, and the encouragement of productive industry; these can by no means be so surely obtained as by a fall in the price of corn.
DAVID RICARDO

Capital Class Commercial Encouragement Prosperity
The factors left out of the Ricardian equation are falling wages and idle capacity.
DAVID RICARDO

Capacity Equation Factor
If a commodity were in no way useful, – in other words, if it could in no way contribute to our gratification, – it would be destitute of exchangeable value, however scarce it might be, or whatever quantity of labour might be necessary to procure it.
DAVID RICARDO

Commodity Contribute exchange Necessary Quantity Scarce Way
Neither machines, nor the commodities made by them, rise in real value, but all commodities made by machines fall, and fall in proportion to their durability.
DAVID RICARDO

Commodity Fall Machine Reality Value
Whether a bank lent one million, ten million, or a hundred millions, they would not permanently alter the market rate of interest; they would alter only the value of the money they issued.
DAVID RICARDO

Bank Issue Loan Money Value

But a tax on luxuries would no other effect than to raise their price. It would fall wholly on the consumer, and could neither increase wages nor lower profits.

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But a tax on luxuries would no other effect than to raise their price. It would fall wholly on the consumer, and could neither increase wages nor lower profits.

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Popular Authors

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