Further Reflections on the Machinery Question

This paper re-examines Ricardo's argument on machinery in the light of Samuelson's recent attempt to add new force to the long stream of its interpretations. This attempt is partly criticised and partly re-utilised to produce a new reconstruction of that argument. This reconstruction is carried out by disentangling the long-run effects of inventions from the short-run effects of the conversion of circulating into fixed capital; and by arguing that both Ricardo II (the author of the machinery chapter) and Ricardo I (the author of the 'previous opinion') are right. The paper also argues that the phenomena of technological unemployment and of changes in technical coefficients, however implicit, do not constitute the core of Ricardo's argument. These conclusions are reached on the basis of the theoretical implications of the classical distinctions between value and wealth, and between free capital (wages fund) and invested capital