The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Corn Model

  • G. de Vivo
Reference work entry
DOI: https://doi.org/10.1057/978-1-349-95189-5_109

Abstract

This expression is commonly used to denote Sraffa’s interpretation of the theory of profits formulated by Ricardo in his 1815 Essay on Profits. The characteristic feature of this theory is that in the production of corn there is a physical homogeneity between capital and product, because capital (which Ricardo tends to identify with the wages paid in the year) is conceived as entirely consisting of corn. Consequently the rate of profits in agriculture (production of corn) only depends upon the conditions of production of corn, and the amount of corn constituting the wage rate, and is determined independently of prices. The rate of profits of the other sectors will have to adjust to that of agriculture, by means of variations of the price of their product relative to corn. If r is the rate of profits established in agriculture, w the (corn) rate of wages, and Li the number of workers employed in the production of commodity i, the price of i in terms of corn will be:
$$ {p}_i={\mathrm{WL}}_i\left(1+r\right) $$
where pi is the only unknown.
This is a preview of subscription content, log in to check access.

Bibliography

  1. De Vivo, G. 1985. Robert Torrens and Ricardo’s ‘corn-ratio’ theory of profits. Cambridge Journal of Economics 9(1): 89–92.CrossRefGoogle Scholar
  2. Eatwell, J. 1975. The interpretation of Ricardo’s essay on profits. Economica 42(166): 182–187.CrossRefGoogle Scholar
  3. Garegnani, P. 1982. On Hollander’s interpretation of Ricardo’s early theory of profits. Cambridge Journal of Economics 6(1): 65–77.CrossRefGoogle Scholar
  4. Hollander, S. 1973. Ricardo’s analysis of the profit rate, 1813–15. Economica 40(159): 260–282.CrossRefGoogle Scholar
  5. Hollander, S. 1979. The economics of David Ricardo. London: Heinemann.Google Scholar
  6. Kaldor, N. 1955–6. Alternative theories of distribution. Review of Economic Studies. As reprinted in N. Kaldor, Essays on value and distribution. 2nd edn, London: Duckworth. 1980.Google Scholar
  7. Langer, G.F. 1982. Further evidence for Sraffa’s interpretation of Ricardo. Cambridge Journal of Economics 6(4): 397–400.Google Scholar
  8. Pasinetti, L.L. 1960. A mathematical formulation of the Ricardian system. Review of Economic Studies. As reprinted in L.L. Pasinetti, Growth and income distribution: Essays in economic theory. Cambridge: Cambridge University Press. 1974.Google Scholar
  9. Sraffa, P. (ed.) 1951–73. The Works and Correspondence of David Ricardo, Vols I–XI. Cambridge: Cambridge University Press.Google Scholar
  10. Sraffa, P. 1960. Production of commodities by means of commodities. Prelude to a critique of economic theory. Cambridge: Cambridge University Press.Google Scholar

Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • G. de Vivo
    • 1
  1. 1.