The factors left out of the Ricardian equation are falling wages and idle capacity.
But a tax on luxuries would no other effect than to raise their price. It would fall wholly on the consumer, and could neither increase wages nor lower profits.
A rise in wages, from an alteration in the value of money, produces a general effect on price, and for that reason it produces no real effect whatever on profits.
Like all other contracts, wages should be left to the fair and free competition of themarket, and should never be controlled by the interference of the legislature.
But a rise in the wages of labour would not equally affect commodities produced with machinery quickly consumed, and commodities produced with machinery slowly consumed.
A rise of wages from this cause will, indeed, be invariably accompanied by a rise in the price of commodities; but in such cases, it will be found that labour and all commodities have not varied in regard to each other, and that the variation has been confined to money.
There is no way of keeping profits up but by keeping wages down....
It is not by the absolute quantity of produce obtained by either class, that we can correctly judge of the rate of profit, rent, and wages, but by the quantity of labour required to obtain that produce.
Unions are asking for more, but we are still a long way from excessive demands. The wage restraint continues.
We're more productive than we were in the 90s and frankly we didn't start hitting wage pressures in the 90s until about a 4-3/4 percent unemployment rate.