The Method of the Pure Ratio in Economic Analysis

  • Amit Bhaduri


The method dates back to Ricardo’s seminal Essay on Profits in 1815.1 According to Sraffa’s interpretation in his celebrated Introduction, the rate of profit in agriculture can be defined as a pure ratio independent of relative prices, if ‘corn’ is both the output and also the only input in the form of capital advanced. With corn as the sole basic product required both for its own production and for the production of all other commodities, Ricardo’s conclusion follows that ‘it is the profits of the farmer that regulate the profits of all other trades’.2


Income Distribution Growth Theory Relative Prex Equilibrium Property Labour Theory 
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© Mauro Baranzini and G. C. Harcourt 1993

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  • Amit Bhaduri

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