Simple Ricardo’s Natural and Market Price

On Natural and Market Price

4.1 If we use labour as the basis for value, we should not deny the temporary deviations of the actual or market price of stuff from their primary and natural price.
4.2 All prices change.
4.3 The changes in price changes profits which changes the flow of capital.
4.4 Everyone wants higher profits. The monied class are people that live off of the interest of their money. Bankers do so too. Their capital forms a large floating capital that changes employments according to market demand.
4.5 A capitalist can forego a part of his money profit for security, cleanliness, ease, or any other advantage.
4.6 Industry A has 20% profits. Industry B has 25%. Industry C has 30%. If Industry A increased to 30%, then capital will flow to it to reduce it back to 20% or the rates of Industry B will rise to 35% and C to 40% as well.
4.7 Our current situation is an exception. The war destroyed our economy which still has to settle itself.
4.8 If all commodities are at their natural price, and profits at the same rate. If silks became in demand their natural price, the quantity of labour necessary to their production, would continue unaltered. But the market price of silks would rise, and that of woollens would fall. The silk maker’s profits would increase, and that of the woollen maker would be below the general rate of profits. Capital and labour would transfer from the woollen to the silk manufacture. The market prices of silks and woollens would again approach their natural prices, and both would then have the usual profits.
4.9 Every capitalist wants to fund more profitable employments. Competition adjusts the exchangeable value of stuff and puts the capital employed in its original state of efficiency.
4.10 Chap 7 of the Wealth of Nations addresses all of this. I regard the exchangeable value of commodities, or the power of purchasing possessed by any one commodity as the same as natural price.

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