Adam Smith set economists and examination question: what determines long-run normal prices and the associated rate of profit. The fundamental difficulty is that the long-run equilibrium prices of reproducible means of production (Smith's “natural” prices) must satisfy two conditions at the...

This paper reproduces a lecture given by Joan Robinson to the British Council at the end of the Second World War. This lecture has not previously been published. The introduction sets it in historical perspective and outlines its significance. This is an important document representing, as it...