e quantity of produce paid for that labour, it
seems that the ratio between the price of labour and its produce would
be the same as before; that the cost of production of wages would be the
same, proportional wages the same, and yet profits different.

To illustrate this by a simple instance, let it be supposed that
one-third of the produce is sufficient to replace the wages of the
labourers who have been immediately instrumental in the production; that
another third is necessary to replace the materials used and the fixed
capital worn out in the process; while the remaining third is clear
gain, being a profit of 50 per cent. Suppose, for example, that 60
agricultural labourers, receiving 60 quarters of corn for their wages,
consume fixed capital and seed amounting to the value of 60 quarters
more, and that the result of their operations is a produce of 180
quarters. When we analyse the price of the seed and tools into its
elements, we find that they must have been the produce of the labour of
40 men: for the wages of those 40, together with profit at the rate
previously supposed (50 per cent) make up 60 quarters. The produce,
therefore, consisting of 180 quarters is the result of the labour
altogether of 100 men: namely, the 60 first mentioned, and the 40 by
whose labour the fixed capital and the seed were produced.

Let us now suppose, by way of an extreme case, that some contrivance is
discovered, whereby the purposes to which the second third of the
produce had been devoted, may be dispensed with altogether: that some
means are invented by which the same amount of produce may be procured
without the assistance of any fixed capital, or the consumption of any
seed or material sufficiently valuable to be worth calculating. Let us,
however, suppose that this cannot be done without taking on a number of
additional labourers, equal to those required for producing the seed and
fixed capital; so that the saving shall be only in the profits of the
previous capitalists. Let us, in conformity with this supposition,
assume that in dispensing with the fixed capital and seed, value 60
quarters, it is necessary to take on 40 additional labourers, receiving
a quarter of corn each, as before.

The rate of profit has evidently risen. It has increased from 50 per
cent to 60 per cent. A return of 180 quarters could not before be
obtained but by an outlay of 120 quarters; it can now be obtained by an
outlay of no more than 100.

He