rise of wages.

If the fixed and circulating capitals were in different proportions, or
if the fixed capital were of different durability, then the relative
value of the commodities produced, would be altered in consequence of a
rise of wages.

First, when the fixed and circulating capitals were in different
proportions, suppose that instead of 100_l._ fixed capital and 100_l._
circulating capital, the hunter should employ 150_l._ fixed capital and
50_l._ circulating capital, and that the fisherman should on the
contrary employ only 50_l._ fixed capital and 150_l._ circulating
capital.

If profits be 10 per cent., the hunter must
sell his goods for 79_l._ 8_s._ For,
To replace his circulating capital
of 50_l._ with a profit of 10 per
cent. would require a value of 55_l._

To replace his fixed capital with
10 per cent. profit, the present
value of an annuity for ten years
of 24.4_l._ at 10 per cent. being
150_l._ 24.4_l._
------
79.4_l._

If profits be 10 per cent., the fisherman
must sell his goods for 173_l._ 2_s._ 7_d._
To replace his circulating capital
of 150_l._ with 10 per cent. profit 165_l._
To replace his fixed capital with
10 per cent. profit, one-third of
the hunter's 8.13
------
173.13_l._

Now if wages rise, although neither of these commodities should require
more labour for their production, yet their relative value will be
altered. Suppose wages to rise 6 per cent., the hunter would not require
more than an increase of 3_l._ to his capital, to employ the same number
of men, and obtain the same quantity of game; the fisherman would
require three times that sum, or 9_l._ The profits of stock would fall
to 4 per cent., the hunter would be obliged to sell his game for 73_l._
12_s._ 2_d._

To replace his circulating capital
of 53_l._ with a profit of 4 per
cent. 55.12_l._

To replace fixed capital, annually
wasted, the present value of an
annuity of 18.49_l._ for ten years,
when money is at 4 per cent.,
being 150_l._ 18.49
-----