[Music] hey hey everyone back again today we're going to continue on the political economy train with david ricardo's the principles of political economy and taxation now before jumping into it if you want to follow me anywhere other than here you can find me on instagram theory underscore and underscore philosophy or on twitter at davidginio if you're new here welcome welcome welcome i'm david i try to explain philosophical text and ideas in a way that makes them accessible to you so if you haven't already like share subscribe tell your friends comment i'd love to hear from you if you found this on youtube you're going to be able to find it pretty much anywhere where you get podcasts where there shouldn't be any ads or if you found this in podcast form you'll you'll be able to find the channel on youtube where i sometimes release videos if you're into that at all and if you want to help me out obviously liking sharing subscribing you can also help me out monetarily via patreon or paypal but no pressure and yeah don't waste any more of your time with that stuff let's continue on the political economy train now to fill in anyone who's just jumping into this at this point my goal my intention was to cover is to cover adam smith david ricardo and then move into karl marx so i've already done adam smith's the wealth of nations so if you haven't listened to that you can go listen to it it's four parts i know it's long but you can go listen to that if you want it would be helpful if you did because some of what ricardo does here is in direct response to adam smith now it would be helpful but not necessary so at any point that ricardo mentions smith criticizes smith and it's kind of funny because this book is a lot of ricardo throwing shade at other political economists like smith malthus i think that's how you pronounce it buchanan say all these thinkers david ricardo is totally dissatisfied with so if you want to go listen to that you can it won't be necessary though because any point that i bring up smith i'm going to fill in the blanks so that it's clear what ricardo is saying in relation to smith and then of course following ricardo here i'm going to be moving into marx at some point so stay tuned for that now okay sorry long intro let's jump into david ricardo's the principles of political economy and taxation so like any book this begins with the preface in which he describes how there are three broad classes of society now this is this is important to know because these classes are always going to be come up and they kind of serve as a benchmark to understand the economic population within any nation so these broad classes are the owners of land who earn rent so those are the landlords you have the owners of stock who are the capitalists who own machinery who own uh who pay laborers who own equipment anything like that and then you have workers who who earn wages so for ricardo political economy is a science specifically it is the science of these three classes of landlords of capitalists and workers and the various dynamics that make them function together now this isn't something that he mentions in the preface but it's important to bring up in order to have a good understanding of of this this idea going forward and that is capital that is what is capital now if you think capital is money you'd only be partly correct in fact capital is much broader than money in fact capital can even not be money at times or there are forms of money or there is money that isn't capital so for something to be capital it must in ricardo's words it must be part of the wealth of a country which is employed in production and consists of food clothing tools raw materials machinery etc necessary to give effect to labor now that's just an important thing to put on the back burner because it's a term that i'm gonna throw around and it's just important not to immediately associate it with with dollar bills with money now another big term that comes up throughout the course of this book is value now he spends the first chapter describing value so we're going to just move into that here or he tries to define it but i want to say that value is a very tenuous term within the domain of political economy and this will we will see this in marks as well where value is exceptionally difficult to define because what it ultimately comes down to is people's individual preference but as we will see throughout this whole process here throughout this book value is inextricably related to labor so the value of a thing will be determined by how much labor was put into it now that is the very short definition but it's one that will serve as a kind of i guess a point of departure for what we're going to get onto here and that is chapter one on value so for him a commodities value will be determined by the relative quantity of labor which is necessary for its production not on the amount paid for that labor now the reason that that is is because the amount paid for labor wages the value of it is going to change across time there are going to be periods in which wages are higher than others but what stays the same is the amount of labor required to produce a specific thing or a specific set of things or what i should say is that all things are going to be produced with the effect or through the effect of labor now roughly there can be two broad forms of value so there is either use value or exchange value now because we measure value in relation to labor use value refers to the amount of labor saved through something's being used so for instance a hammer is able to save some labor or to make labor easier and so its value then will be tied to the amount of labor it is able to save now for something's exchange value that is how many dollars it'll take to buy a thing if i make a hat and it's 15 then i'm earning fifteen dollars worth of value value is not the fifteen dollars it value is actually how much labor i am able to get for that hat so if i sell the hat and get fifteen dollars i have 15 dollars worth of possible labor that can be spent put back into capital which can then help the process keep going me to be able to make more hats or whatever because when you sell something what that person is giving you in the form of money is giving you the i guess the bounty or what they earned for their labor so you are taking part of their labor in the form of the money they give you so that you can give them the thing that you've made through labor now he adds to this that is he adds to the idea of use value and exchange value the idea that as something goes up in use value it will go down in exchange value and vice versa so for example air has a lot of use we all need air likewise with water but the value of those things are pretty low in fact they cost nothing and where by by contrast something that is made purely for superfluous ends like vanity or like reputability like a diamond necklace has very little use value but it has a great deal of exchange value now a commodities exchange value is going to be determined by not only production that is not only labor put into it but it's also going to be determined by scarcity so if something is hard to find if there is high demand for it but the supply is limited its monetary value its nominal price that is the dollar figure of what it will cost is going to go up now having set all of this out this idea about labor being a determining or i guess a constituent part constitutive part of value ricardo then says wait a second we must turn our critical gaze upon this idea of labor as though it's just something that is unchanging that the same amount of labor is going to be used and is going to be worth the same amount you know today as it will in a hundred years ricardo says that ultimately there's no real way to determine labor to have a perfect standard to determine not labor sorry to determine value and that is because it's ultimately subjective and any of these measurements we use to determine value whether it's labor or if it's i don't know necessities like corn because corn can be argued to be a good indicator of value because we all need corn and if we measure things in relation to their value in relation to corn then we can get a good idea of its value in relation to an absolute necessity but or you know if we determine something's value in relation to gold we are still going to run into issues because their prices that is the number value that we use to understand value even though it's not a perfect measurement those values are always going to be changing labor is always changing price of corn is always changing what it can buy in relation to other things how much labor it takes to make all of these things are always changing and so ricardo says while we'll never have a perfect standard measure of value we use labor we use gold as pretty decent indicators because we just don't have anything else that's so neat that's so that is so consistent even though it's not perfectly consistent so what adam smith says in the wealth of nations is that with something like corn that is he takes to be a kind of baseline of all possible value because it's something we all need something we all consume he says that if there is a change change in the price of corn or the value of corn then but let me just asterisk price and value are not congruent they are not the same thing i'm just using it to give us the most easy way to understand uh an issue with smith here so smith says that if there is a change in the price of corn then that means something else has happened nothing has happened to corn but maybe money has gotten less valuable or maybe money has gotten more valuable which would determine or change how much money is needed to buy corn that is always going to have the same measurement of value whereas ricardo says this is just totally unrealistic it's almost like it's almost like smith is just bracketing off corn from a broader economy from the exchange in the free market as though it just transcends everything and floats above everything when in fact it itself is always going to be subject to various changes but even so to reiterate ricardo thinks that these are the best measurements we have so he will talk about value in terms of labor in terms of corn in terms of gold but his real focus here that is ricardo's is on labor value being determined by labor how much labor is required to buy a thing how much labor you are then saving when you buy a thing you know or whatever but when we talk about value it's not as though wages paid to laborers is going to be one of the um i guess one of the expenses to bring something to the market to produce an object and then bring it to the market there's also going to be the cost that goes into machinery that goes into maintaining buildings that goes into raw materials now all of these things as well because they play a part in producing some commodity will determine and will affect its value so it's not just human labor per se that gives something value it's all of these other things now if you're i guess if you're clever you'd say well none of those other things exist on their own they were only made possible through labor which is true so if there's a machine that is introduced into a manufacturer or into a factory or whatever what that might bring more things to market it might make it easier for things to be produced and so we will see a decline in labor but we're going to problematize that as we go forward but we will say for example that labor has gone down because the machine takes over the work of four or five people let's say but it may have taken however many years however many people to actually build that machine so it itself is the product of labor so when we include that price into the price of a commodity we are still only attaching labor price i guess the value of labor to that commodity because the only way that that machine was able to enter the factory was through labor and this isn't just true under industrialization industrialized capitalism he provides the example of hunters hunter-gatherers hunting beavers for example where he says that what they might trade that for to another another party another group of people is not just the amount of time or labor that went into acquiring the beaver it was also how much labor they had put into making the tools in order to hunt the beaver let's say they use a sling or a bow and arrow whatever all of that is going to be factored into it as well so labor so value i should say is not only going to be determined by the actual presence of laborers but all the history of labor that has gone into the production of a thing which includes like i said the labor put into making machines labor of transportation labor of i don't know overseers supervisors whatever now if you have two different commodities two different products that are made with the exact same amount of labor then technically they should be worth the same amount in the market that is their value should be the exact same now there are so many problems with this not because ricardo is necessarily wrong but because we live in a different world now and it feels very strange to think about value in this way so for example when um i don't know when one of the kardashians is paid millions of dollars to make a twitter post are they doing labor and if not where is that capital that money those dollars coming from what is it being paid for and so here we enter into a kind of new realm where capital isn't nearly as attached to labor as perhaps it once was or if it is it is much more hidden which is kind of marx's nightmare but we'll get into that with with marks as we go on just something you know this is just something to keep on the back burner now if everything was equal between two manufacturers that were producing two different commodities that is the amount of labor and all that put into these two different commodities then their value should be the same but the world doesn't work that way and one manufacturer might have better machinery than another or another manufacturer might have better workers than another what you know whatever any of these things are going to change the value or the price even other thing when it comes to market when it is prepared to be sold but these are two different things so let's say one enterprise had better machinery and one enterprise had better workers these draw from two different kinds of capital so if we remember capital is everything it can it can include you know money put into a company in order to pay wages or to pay for machinery or the machinery itself all of this falls under the domain of capital but capital can be further differentiated into either fixed capital or circulating capital so fixed capital is the capital that is able to be procured or put into machines things that you're going to have for a long time that you know you might buy once and you you have to pay a little bit to maintain but it's going to be there and it's going to keep earning you the same amount of money hopefully now circulating capital is capital spent on labor which is want to change it might change quite a lot actually so you're paying an employee and if the employee is dissatisfied with how much they're making they might go work somewhere else and so that labor is not going to be or that capital is not going to be fixed you don't own laborers when you pay them wages which is kind of a this is what ricardo thinks so we'll accept that for for now but of course marx is going to problematize all of this now between fixed capital and circulating capital they form a spectrum i should say so it's not just as though fixed capital exists uh you know totally separate from circulating capital they in fact mirror one another in a lot of ways so in order to maintain machines it is required to hire maybe certain laborers that are going to watch over it which are then apt to change they might change you know they might want to earn more money they may work somewhere else and so does that then change the way that fixed capital is associated with the machine or circulating capital is associated with the machine because now it is determined not only by it as being a stationary thing but it is now dependent upon circulating capital so this is he doesn't really elaborate on this but it's kind of an important distinction or it's good to know that fixed capital and circulating capital form a spectrum now here is the kicker when it comes to fixed capital and circulating capital if you had a business that focused more on fixed capital so let's say a factory it had lots of machines that it relied on to keep earning it the same kind of money now if we contrast that with something a business that relies more on circulating capital let's say for example i don't know you have a business of painters and these painters go around and paint people's houses that is all circulating capital because you don't own like a building you might not even own a building you might not even own equipment you might not own anything it's just you're paying people to do a job and they might leave they might go whatever now if we compare these two kinds of businesses one reliant on fixed capital versus one reliant on circulating capital a rise in wages in each of them in or in either of them is going to have different effects on the price of the thing being produced or the service being provided so he believes that with a company that relies more on fixed capital as wages go up so as the employees are paid more the value of the product produced will go down whereas with circulating capital or a company or business that relies more on circulating capital as wages go up the price of goods the things being produced will also go up so what what he's essentially saying here is that less durable machines or less durable equipment things that are you know going to need a lot of uh circulating capital going through them in order to maintain them is going to have more enough of an effect on the cost of the thing being produced than in the case of fixed capital or it will have a different effect i should say so if there's a business that relies on circulating capital a lot of money is going to be put to keep i guess people happy to keep if there are like little pieces of equipment being used they probably aren't very durable because you know there's not a reliance on big heavy steady fixed machines then what's going to happen is that as wages go up and all of those pieces of equipment are going to need to have their little bit of maintenance they're going to need more of them is going to need to be bought et cetera et cetera as wages go up because more labor is then you're still going to be needed then so too will the price of commodities go up or the price of the things being produced to go up now if there's a company or business that relies more on fixed capital as wages go up the owner of the company will say well i'm just going to lean more heavily on all my machines because you know i don't want to have to pay these people more and so they will find ways to get around having to pay the people more by probably firing them laying them off relying more on the machines which is going to allow them to actually bring their prices of things down or to keep them the same now all businesses rely on some kind of relationship or proportion between fixed and circulating capital no one business relies purely on one and another business purely on the other and so part of the ways that value is ascertained or it demands a an engagement with all of these dynamics between fixed and circulating capital which is all very abstract and all very difficult to do because it's actually quite difficult to ascertain the difference between circulating and fixed capital because it's a spectrum and so the best we can kind of do is to just well i guess try you know to attach somewhat arbitrary significance to certain things like labor like gold corn in order to have some kind of benchmark or to be able to say that that machine there represents fixed capital whereas uh you know the paper person the paper boy going throwing papers around is an example of circulating capital not mentioning of course the fact that the bike is fixed capital for the kid who's relying upon it potentially forever to do their job but anyways but with all this being said a raise in wages does not necessarily mean that the value of labor has gone up it might have meant as well that the value of money has gone down so it takes more money to be able to pay for people to do their job so if before uh ten dollars was what you paid someone an hour if that raised to eleven dollars because of inflation the people are still going to be the workers i should say are still going to be earning the same amount in real value because eleven dollars is going to buy you out in the real world everything the ten dollars used to you're going to have a higher wage but you're still going to have the same buying power or the real value will have stayed the same whereas the nominal value will have changed the nominal price will have changed which is just the number price so to to determine something's real value will be to say okay how much of other things in the world can i buy with this thing now that is what it's called its natural price so let's say a hat will get you two pieces of cloth let's just say for example it gets you two pieces of cloth and then the next year it can suddenly get you three pieces of cloth now if we just look at that one example we could say either that the value of the hat has gone up allowing you to buy more with it you know with the money you get for it it'll allow you to buy more cloth or the value of cloth has gone down in which case it takes less to buy more of it but if we found out as well if we took many more examples let's say one year a hat you know you get two pieces of cloth you can get two cartons of milk you can get half a dozen eggs with it all of that you know each one of those things potentially for the hat and the next year you're able to get more of all of those things you can probably be pretty certain that the value of the hat its real value has gone up so it has become more expensive it has gone above the natural price that is what it was the year before in relationship to all of these things and it has attained a kind of new value in that world now of course with time those things will come to balance out again and they'll attain what what is kind of called the natural price of things that is however many things the the hat can buy in relation to others but for a moment it will have risen in real value not just in the dollar value because now it buys a lot more of everything else so value is determined largely by relationships so the relationship between labor gone into producing something but also it can be ascertained by relationships between various people between the three classes broad classes of society between landowners capitalists and workers where if one of those groups groups is buying power from one year to the next suddenly goes up then we are seeing a disequilibrium we are seeing a departure from the natural rate or the natural price in the natural order of things and one of those classes has attained more power than before or more real value than before and that you know that's essentially lays out the first chapter it's the longest of the bunch so don't worry we're gonna the next ones are gonna be much quicker and that sets out pretty much his view on value which is an important one and one to really have a strong grasp of going forwards now that brings us here into chapter two on rent now this is probably the most important part of this whole book because here is where he establishes or lays out his view of rent that is diametrically opposed to many other political economists of the time specifically adam smith buchanan and malthus malthus who all have an erroneous or incorrect view of how rent the value of rent or the even the price of rent is determined so in the work of adam smith in the wealth of nations he pretty much says that rent is the product of profits so if you know i owe if i owned a piece of land and some capitalists were to come along and say hey this is a great piece of land let me put up this building here i can start you know manufacturing and i will pay you a proportion of the profits being made or if i have a plot of land some farmer might come along as capitalist might come along whatever and say hey this is a great plot of land for me to earn some uh some dollars off of by growing some corn let me grow some corn here and i'll give you some money for profit or in proportion of the profit that i make so that's how the landlord will make money through rent for adam smith now ricardo sets out a completely different vision of rent here and it is the crux of this whole book for for me it i don't know how it wouldn't be the crux of the whole book because it comes up over and over again so it's very important to know but it's also a little bit tricky to illustrate at least through words so i'm going to try be as clear as humanly possible in order to make this accessible so that you know what's going on now let's imagine a new territory is discovered with no one living on it and it is just filled with fertile land the people who find it and there's no one else there the people who find it obviously are going to start working on the land and they're going to start growing things on the part of the land that is the easiest to grow on which just makes sense they're not going to go to the barren parts of the land to try to make to try to grow produce it's just a bad idea so they're going to go to the most fertile part of the land that is the easiest to work on but because they're the first ones there they aren't paying any rent so let's say you know they have a colony or there's a there's a you know a country that they are part of that they've just kind of departed from for a bit they might say okay well we are making so much corn on this plot of land to feed ourselves yet we have all of this surplus corn we have corn that just goes way above what we need why don't we just sell it back to the country that we came from sell it back to the nearest city whatever so they are only going to be making like pure profit off of that after they pay the workers that they've got there or whatever they're going to just pay them and they aren't paying rent to anybody so they're just having a great old time making as much corn as possible and you know what that does is it makes the population happier now let's say that suddenly the corn that was being made on that piece of land was no longer enough so the populations just started to grow uh for any number of reasons the population started to grow there might be more demand coming from the city and so the people on this plot of land are like okay well we have to expand but expanding demands that they expand into the less fertile land they're going to need to expand into those parts of the country that make it harder to grow on probably so let's call this next plot of land plot two so we have plot one that was super easy to grow on now we have plot 2 and it's a little bit more difficult so by putting in the same amount of labor you make less because it demands more work to actually get produce from it to get more corn from it or to get the same amount as the first plot of land so you have two options either you employ the same amount of labor and make less produce you make less corn or you employ more labor and you make the same amount of corn in either case it's going to be somewhat detrimental so it's going to either cost more to employ more labor to earn the same amount to make the same amount of corn or you're going to make less money off of it because you're going to have paid made less corn by employing the same amount of labor but between these two plots of land that is between the fertile one plot one and the less fertile one plot two you can't charge different prices with the corn otherwise the plot on the second land won't be able to sell any of their corn and it will have been there would have been no reason for it so they have to sell the corn at the same price otherwise there was no point of doing it in the first place so the value of the corn then the price of the corn then is going to be determined by however expensive it is to make to grow on the less fertile plot of land so you're going to use that as your benchmark so let's say on the first plot of land it cost a hundred dollars you know this is absolutely a ridiculous number but let's say for example it cost you a hundred dollars to make all of the corn and you were able to sell that for a hundred and ten for example so you make ten dollars profit on the first plot of land now the second plot of land you can you you have to put in a hundred and ten dollars in order to make i don't know 115 so you only make a profit of five dollars on the second plot of land so the first plot of land makes a profit of ten dollars whereas the second plot of land makes a profit of five dollars now it wouldn't make much sense if one of those people was earning more than the other that is with one person earning ten dollars another person owning five dollars or earning five dollars because then the person earning five dollars will say screw this i'm out of here so they must actually create some kind of equilibrium between the two in order to balance it out and this equilibrium comes in the form of rent where now the person who owns the most fertile plot of land is going to i guess transform into this thing called the landlord who is then going to take five dollars off of the ten dollar profit in order to pay for themselves to pay you know or to earn money for owning this fertile plot of land so rent is going to come out of the profits of the most fertile land whereas the other plot of land plot of land number two pays no rent for ricardo so the price of a thing is going to be determined by however difficult it is to make the less fertile plot of land because it has to be equal all across the board so we have to take the lowest possible measure as being the determining one not lowest as in money value but lowest as in least quality one that is sold for the highest amount or that is the most difficult to make that is therefore sold for the highest amount otherwise no one would work that land because if one if the first plot of land just made their prices higher than the other or lower than the other sorry then they would just run them out of business and there will have been no point but the problem will remain how do you make up for the demand how do you satisfy that demand so the value of an object the price of an object is going to be determined by the least fertile plot of land if we're talking about raw produce here if we're talking about things being grown whereas rent is only going to come out of those ones that came before it that are more fertile than the other one and the rent is going to be the difference between the profits the first one makes versus the profit the second one makes now let's say hypothetically that second plot of land has been worked to the as much as it can be and the third plot of land then needs to be uh explored needs to be used up that plot of land will then determine the price of the objects that plot of land the plot of land number three will pay no rent and now plot of land number two will start to pay rent because it is earning more profit than the other one plot of land number three and the difference between them will determine how much rent is being paid while still the difference between the first and the second but as well now between the first and the third is going to determine how much rent the first plot of land makes now this might all be very difficult to imagine in your head so if you just imagine three plots of land just to i guess get the most basic understanding here the most fertile one will pay the most rent whereas the least fertile one is going to be the one that determines the price of the objects and it is the one that pays no rent and rent is determined by the difference between the most recently the most recently employed land versus the last and anyone before it the employed land before it now in adam smith's work he said that rent will determine the price of objects if we take what or the price of things being produced if we take ricardo seriously here then he's effectively shown that that is not the case rent does not determine the value of objects in fact it is the labor the difficulty and toil of the least fertile land that is going to determine the value of grown products in this case so high rent doesn't come from earning more per se high rent is the product of a less in abundant land being uh being employed being sought after being cultivated not the sign of the most abundant land being cultivated so rent is not determined by high price of commodities or the other way around rent does not determine that it is only determined rent is determined by labor put onto the least fertile least uh workable land so if new machines were used on the land or if new methods of agriculture were discovered what that would mean might be that we no longer need to work on the less cultivated cultivatable lands or the less fertile lands or we're able to earn to make more from it now what that will do is it will shrink the gap between the first plot of land and the last plot of land being cultivated and what that will mean is actually a reduction in rent so as a country grows more efficient as it grows more productive as it develops new technology rent will actually go down for ricardo not up because for smith he says as society progresses rent will go up because people are earning more and they'll be able to pay more ricardo thinks that that's totally wrong for the reasons i've already just said so whereas the capitalist and the laborer are kind of on the same side here they want their lives to be easier when it comes to working the land the the landlord doesn't want that the landlord wants it to be difficult because that means then that worst land is being cultivated which means that it is very difficult which means that their the price paid to them in rent will go up because there will be a bigger gap between the most fertile land and the least fertile land now that's an important thing to know as we go forward here throughout the rest of the book because it's going to come up again and again and again now here we move on to chapter three on the rent of mines where he says that essentially like land the rent of minds the rent of minds will be determined by the difficulty in i guess attaining things from the mind and so the most difficult mind to actually mine in will be the one that is going to determine the value of the objects circulating within the economy and not because of the easiest mind to work in so the value of anything taken from the mines like gold or silver or whatever it's its value is going to be determined by the total quantity of labor necessary to obtain it and to bring it to market so it's not as though it's just going to determine value or increase value because these things like gold and silver are innately valuable they're only going to go up in value as they have a relationship to the labor put into them and that puts us here into chapter four the difference between a natural price of something and the market price so the natural price refers to the i guess the price that anything has in relation to everything else in the market and so this natural price is a price at equilibrium between supply and demand between other things in the market and so on of course there might be like trends for example that make it so that uh linen is more fashionable than whatever cashmere is more fashionable than linen whatever you might have trends like that and you might see then the money price of something go up but it will eventually gravitate back down to its equilibrium to its natural price and whereas its market price will just be what it goes for nominally how many dollars it will be you know it'll cost to get it but you know just to meditate on this for a second it's exceptionally interesting to me that this idea about value is so determined through money because money is no real standard of value or that value is determined by it's a thing's relationship to other things like how many of those other things can you get for this thing so value is always being deferred like it's never found in anything itself but it also it only comes from relationships to other things in a certain economy of of commodities now what this does is essentially reveal just how subjective it is and it's all that much more mysterious to me how then we're able to have any agreement at all yet we can but anyways that's just something that interests me now that puts us into chapter 5 on wages and this book is like 30 some chapters long and the first two that is the one on value and the one on rent are the longest but everything else is like a few a few of them are only like a page long and it's kind of silly so it might come off like i'm just saying like a list like and then this and then this and then this and sorry that's not the best storytelling but working with what i got here so yeah chapter five on wages so the value of wages for ricardo is going to be affected by the supply and demand of laborers and the price of commodities so like any other mar any other product in the marketplace wages or labor has both a natural and a market price so the natural price of labor is the price required in order to keep the laborers alive and happy because if you don't do that then you won't have laborers so if ten dollars is the agreed price let's say for per hour for a laborer it is implied that 10 is what is going to be required for them to have shelter to have food to have whatever else they might need in order to survive now the next year that might have to go up to 11 because the price of everything else has gone up for whatever reason inflation whatever so what that means then is its market price has gone up it's uh nominal price it has gone from ten to 11 but its real price has stayed the same because it is still implied that they are still going to be making the same amount to buy the same things that they could before the same necessities the same food shelter that they could before so if the cost of necessities goes up if the cost of goods go up so too much the cost of wages because you still need your laborers to be able to make or buy those things i should say that they need to survive but it works both ways so if the price of necessities or goods goes down then so too will the price of labor now that's all well and good in some kind of fairy tale world where people will just accept to have a decrease in wages but that's really not how it happens in the real world as as it shouldn't but in any case this is what he gives us that as the price of commodities go up then wages will have to go up as well and the reverse is also true now the natural price of labor will always attain some degree of equilibrium but the problem here is that sometimes the effects are difficult to ascertain where capitalists might say okay i think we can bring down the price of labor i think we can pay them less because the price of x y and z things has gone down so they should be fine but then they do that and suddenly thousands of people starve to death and they're like oh oh we have to bring it back up so what is the price of life at that point it seems totally wrong to just leave it totally up to the free market because there are these potential negative effects there seems to that there should be oversight to make sure that no single life is lost because of someone's greed but ricardo doesn't consider that instead he says that almost any tax or any kind of law that limits this or that sets like minimum wage standards is going to be harmful to the poorer classes and he also proposes regulating reproduction of poor people which is you know just eugenics that is very clearly very clearly problematic and not anything that should be espoused and is quite ironic because he's against one form of regulation but for another he's okay with regulating bodies but not regulating the market and it's funny we see very much that same uh the same impulses that govern many conservative trends in north america it's all about policing people's bodies but let the market that affects people on a an immeasurable scale let it do whatever it wants and that'll stop the first episode here at the end of the chapter five on wages and from here we'll move on from chapter six on prophets and if if you listen this far thanks a lot uh if there's anything i got wrong here i'd love to hear about it if there's anything you liked you know leave a comment if you're listening to this on apple podcast and i think even spotify now if you can leave comments wherever you've uh listened to this and podcast for me know do it i'd love to hear from you leave five stars if you can if you like what i did and uh yeah catch you next time take care