all cultivated land to become equal (Ekelund, and Hebert, 1983). According to Ricardo (1817), as costs and profits were the same on all cultivated land, a surplus was earned on non marginal (more fertile) land. Ricardo called this surplus earned on non marginal land rent. Ricardo felt that the consequence of this relationship was that, as the population expanded and less fertile land was brought under cultivation, profits became squeezed by (1) an increasing proportion of total output which was allocated to rent, and (2) the basic minimum level of sub sistence which was allocated to labor wages. In this theoreti cal conception, Ricardo assumed that prices were primarily the product of the quantity of labor used in the production pro cess, although he did recognize that capital costs influenced price levels. His theory of value, however, was grounded in the principle of labor.
Ricardo held that agricultural profit determines the gen eral rate of profit in an economy. Ricardo (1817,
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