If by wages, be meant what constitutes the real affluence of the
labourer, the _quantity_ of produce which he receives in exchange for
his labour; the proposition that profits vary inversely as wages, will
be obviously false. The rate of profit (as has been already observed and
exemplified) does not depend upon the price of labour, but upon the
proportion between the price of labour and the produce of it. If the
produce of labour is large, the price of labour may also be large
without any diminution of the rate of profit: and, in fact, the rate of
profit is highest in those countries (as, for instance, North America)
where the labourer is most largely remunerated. For the wages of labour,
though so large, bear a less proportion to the abundant _produce_ of
labour, there than elsewhere.

But this does not affect the truth of Mr. Ricardo's principle as he
himself understood it; because an increase of the labourer's real
comforts was not considered by him as a rise of wages. In his language
wages were only said to rise, when they rose not in mere quantity but in
_value_. To the labourer himself (he would have said) the _quantity_ of
his remuneration is the important circumstance: but its _value_ is the
only thing of importance to the person who purchases his labour.

The rate of profits depends not upon absolute or real wages, but upon
the _value_ of wages.

If, however, by value, Mr. Ricardo had meant _exchangeable_ value, his
proposition would still have been remote from the truth. Profits depend
no more upon the exchangeable value of the labourer's remuneration, than
upon its quantity. The truth is, that by the exchangeable value is meant
the quantity of commodities which the labourer can purchase with his