KARL'S QUOTE'S

- On wages determining prices, Marx says,” I might appeal to practical observation to bear witness against this antiquated and exploded fallacy. I might tell you that the English factory operatives, miners, shipbuilders, and so forth, whose labour is relatively high priced, undersell by the cheapness of their produce all other nations; while the English agricultural labourer, for example, whose labour is relatively low priced, is undersold by almost every other nation because of the dearness of his produce…The dogma that wages determine the price of commodities, expressed in its most abstract terms, comes to this, that ‘value is determined by value’, and this tautology means that, in fact, we know nothing at all about value. Accepting this premise, all reasoning about the general laws of political economy turns into mere twaddle. It was, therefore, the great merit of Ricardo that in his work, ‘On the Principles of Political Economy’, published in 1817, he fundamentally destroyed the old, popular, and worn-out fallacy that ‘wages determine prices’, a fallacy which Adam Smith and his French predecessors had spurned in the really scientific parts of their researches, but which, nevertheless, they reproduced in their more exoterical and vulgar chapters.” Value, Price, and Profit pp26-29.