Note 197-1 — Chapter VI

Compare Adam Smith, I, ch. 7, fin. This relative increase or decrease of one branch of income at the expense or to the advantage of another, should be distinguished from the absolute change of its amount which does not affect the cost of production. Thus, for instance, when the rent of land indeed increases, but in consequence of a simultaneous improvement in agriculture, a decline in the rate of interest, and an enhancement of the price of wheat is avoided (§ 157). So, too, when individual wages increase on account of the greater skill and energy of labor, but the same quantity and quality of labor do not become dearer (§ 172 seq.); and lastly, when the rate of interest remaining unaltered, the receipts of capitalists are increased by reason of an increase of their capital (§ 185).