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P. Sraffa (Cambridge University Press, 1952). RICARDO, D. (WORKS VIII) The Works of David Ricardo: Volume VIII Letters 1819-1821, ed. P. Sraffa (Cambridge University Press, 1952). RONCAGLIA, A. (1978) Sraffa and the Theory of Prices (New York, Wiley). SAMUELSON, P. A. (1957) 'Wages and interest: a modern dissection of Marxian economic models', American Economic Review, vol. 47, pp. 884-912. SCHUMPETER, J. A. (1954) History of Economic Analysis (London, Allen & Unwin). SETON, F. (1957) 'The "transformation problem"', Review of Economic Studies, vol.

He argued that such an equilibrium would be characterised by sufficient unemployment of labour to ensure that the equilibrium wage lay at the subsistence level. 56 The value of labour power is therefore equal to the value of the subsistence wage bundle. It is also assumed that technology is such as feasibly to allow a higher wage rate. Marx deduces from this that surplus value and the rate of surplus value, sfv, will be positive, as labour inputs are required in all production and the subsistence wage is non-zero.

Ricardo's analysis 'leads to erroneous results because it omits some essential links and directly seeks to prove the congruity of economic categories with one another' (Marx, 1862b, pp. 164-5). See also Marx (1862b, pp. 167-8, 174, 190, 427). On this basis he also attempted to derive what he considered adequate theories of circulation, rent and money. See Marx (1885, 1894). In this section we ignore all these matters. Marx argued that 'reality as it appears' to social actors and theorists in capitalism is deceptive.

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