The proposition of Mr. Ricardo, which states that a rise…
“The proposition of Mr. Ricardo, which states that a rise in the price of labour lowers the price of a large class of commodities, has undoubtedly a very paradoxical air; but it is, nevertheless, true, and the appearance of paradox would vanish, if it were stated more naturally and correctly.”
About This Quote
This interpretation was drafted with AI assistance. It is one reading of the quote, not the author's own explanation.
Higher wages increase production costs, which can reduce commodity prices when labor is a dominant input, revealing a counterintuitive relationship in economics.
In simple terms: Wage rise can lower some commodity prices.
Key Takeaway
Labor cost dynamics affect market prices.
Themes
economics
paradox
labor markets
price theory
supply and demand
Mood
analytical
thoughtful
Type
theoretical
explanatory
When to use this quote
- policy analysis
- academic teaching
- business strategy
- investment forecasting
Key Concepts
cost pass‑through
input elasticity
market equilibrium
Practical Applications
- economic modeling
- price forecasting
Questions to Reflect On
- How does labor cost elasticity shape price outcomes?
- When might this paradox not hold?